Chula Vista residents set to receive refunds from controversial phone tax collected by city

Tax money to be returned

CHULA VISTA, Calif. - Thousands of Chula Vista residents can expect to get some money back from their local government soon.

The Chula Vista City Council transferred roughly $8 million from its general fund Tuesday afternoon for a settlement over its controversial City Utility Users Tax.

A couple of years ago, a couple residents sued the city because they felt the tax was illegal. They argued the language in the city code was too vague and that the city should not be collecting. Chula Vista settled for $8 million.

"I wasn't too happy about it," said Chula Vista resident Bill Richter.

Oddly enough, Richter said he would rather not get his refund. He thinks everyone got a raw deal.

"I don't think the lawsuit was effective because the tax will continue," he said.

Richter said the refunds, which can run as much as $150 per person, are ridiculous because Chula Vista is still collecting the tax on phone bills.

Chula Vista City Manager Jim Sandoval said the wording of the tax law was updated to make it legal. As part of the settlement, the city will pay out $3.7 million to residents. The remaining $4.2 million will be spent on things residents can use.

"It's monies we would want to spend on one-time items," said Sandoval. "You know parks, recreation … things that are for the general public's benefit."

"I feel like I was misled," said Richter, who argued the refund is not good enough."From now, 20 years from now, we'll continue to pay that tax."

He thinks Chula Vista should find a better way to raise money other than through his phone.

"I think they need to do it the right way," said Richter.

As part of the settlement, Chula Vista capped the tax at 4.75 percent. It used to be 5 percent.

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