Prop. H Vote Could Impact Chula Vista Budget

Rejection Of Utility Users Tax Update May Lead To More Cuts

With Chula Vista needing to slash millions of dollars from next year's budget, the city could end up having to cut even more if voters reject Proposition H in November.

10News learned Chula Vista will need to make $12 million in cuts, but that figure could jump to $18 million if the city does not update its Utility Users Tax, or UUT.

The UUT is a 5 percent tax residents pay on all their phone bills. Phone companies collect the tax and the pass it on to the city. The tax is worth roughly $6 million a year.

However, Chula Vista's UUT was enacted in 1970 and is now considered outdated. Proposition H would update the ordinance to encompass more residents and services, and city officials said a vast majority of residents would not notice a difference if Prop. H is approved.

"So what you're saying is most of the people, if Prop. H passes, will not notice any difference?" asked 10News' Joe Little.

"I would say that it's like 95 percent of the people won't see any difference at all," said Michael Meacham of the city of Chula Vista.

Some opponents, however, have argued that Prop. H is still a tax hike.

"You're going to see at least a 5 to 10 percent folks that are currently not receiving a Utility Users Tax see a 0 to 5 percent rate increase; that is a tax," said Ed Herrera, who is part of a group against the passage of Prop. H. "This is not about changing language and protecting taxpayer dollars. This is simply about a dash for cash."

"Is this a tax hike?" Little asked Meacham.

"No," Meacham replied.

City officials said it needs the updated code or it may not continue to collect the $6 million in annual taxes.

"So our ability to collect the tax would completely stop, go away, on all levels," said Meacham.

Opponents said they don't care and believe City Hall should dig into its own pockets before gouging its residents.

"This is a blank check that very well could go to more salary increases," said Herrera.

Chula Vista is the only city in San Diego County with a UUT.

Several other California cities, including Los Angeles and San Francisco, collect the tax.