By Sharla Sikes

Voters in Los Angeles approved a 9 percent tax on VoIP calls, as well as reducing other phone taxes by 1 percent. The vote on Measure S was approved by nearly two thirds of voters, and the tax dollars are destined for law enforcement improvements.

But will they? Critics ask if the funds will go toward their advertised use instead of the city’s general fund. And the measure may not even be legal.

Last fall, Congress passed a 7-year extension of a federal moratorium on taxes imposed on Internet access last fall. The moratorium, signed by President Bush Nov. 1, protects Internet services from federal, state and local taxes.

Brendan Huffman, president of the Valley Industry and Commerce Association–which opposes the measure, along with other business and commerce organizations–said voters had little time in which to learn more about the measure.

“We were disappointed at how the Los Angeles City Council placed this measure on the ballot. It came out of nowhere,” said Huffman, leaving almost no time for opponents to muster arguments against it.

The tax was proposed about two weeks after the LA City Council gave city employees 20 to 25 percent pay raises. The city says the raises were claimed to be a matter of public safety.

“In the past, large cities have been able to rely on the state and federal government to assist in providing necessary funding for public safety. Today, however, the state of California and the federal government have allocated far less money to all cities and particularly to Los Angeles for public safety, education, and traffic relief, which is why Measure S is essential,” said William Bratton, the city’s police chief, in a guest editorial in the February 3 issue of the Los Angeles Daily News, urging voters to support the measure.

Huffman counters that, saying the city should have reviewed its revenues before approving the raises.

“It’s a matter of honesty,” Huffman said. “They should have been upfront with us.”

One intriguing—and annoying—aspect of Measure S is its 50 percent tax break for telemarketers: Almost universally hated, telemarketers should have to pay more taxes instead of less, Huffman states.

When the tax is challenged, as it’s likely to be, chances are high it will be overturned.

I, for one, certainly hope so. If the city needs revenue, I agree with Huffman that it should have disclosed its shortages rather than cloaking a new (and illegal) tax under the guise of public safety. The tax break for telemarketers is maddening, as well.

I wonder if all those highly paid city officials will have to give back their raises when the measure is overturned. Of course not—so what public programs is Los Angeles going to short in order to pay its fat cats?

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