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New budget would hike phone billsMay 23, 2009 (The Arizona Daily Star - McClatchy-Tribune Information Services via COMTEX) -- Tucsonans would pay more on their home phone and cell-phone bills under a new city budget proposed by City Manager Mike Letcher on Friday. Letcher's newest budget calls for home- and cell-phone users to pay 2 percent more because of a utility tax the city may charge all Tucson home- and cell-phone providers. Raising the utility tax on telecommunications providers would contribute an extra $5.2 million in revenue to help balance the city's budget. The taxes would almost surely be passed on to customers. It would also mean the city's fiscal woes would contribute to an increase in most of the bills Tucsonans pay on a monthly basis: electric, water, garbage pickup, home phones, cell phones and gym memberships. The proposed budget also includes a $1 increase in the bed tax paid on hotel rooms, a hike in city bus fares and a tax on tanning salons. Letcher's newest proposal is likely very close to the version the City Council will ultimately pass, because it addresses concerns of three different factions of the council. With the $5 million in taxes from the residents' home- and cell-phone bills, and other budget fixes proposed earlier in the week, the city can eliminate the controversial 2 percent tax on renters -- a proposal that helped spur more than 700 people, most of them critical of the renters tax, to turn out for a public hearing in April. The tax would have generated $10 million annually. Four council members have raised concerns about the renters tax. Letcher's budget also keeps $1.8 million raised by increasing bus fares in the Sun Tran budget rather than put it toward the city's $424 million general-fund budget. That was a pet issue for council members Karin Uhlich, Regina Romero and Steve Leal. Uhlich said she is pleased Letcher's latest proposal "seems to be bringing us to a balanced budget without using bus fares." The new budget proposal also includes a $2 million contingency fund for the 2010 budget year, which begins July 1, and an additional $2.2 million contribution to the city's rainy day reserve fund, on top of $1.5 million that was in a previous budget proposal. That would increase the city's reserves from 3.8 percent to 4.3 percent. Councilman Rodney Glassman raised concerns about the reserves earlier this week. Although he hadn't seen the budget proposal, Glassman said it sounded positive. "If it doesn't include a rental tax and it increases the reserve fund, it sounds like we're moving in the right direction," Glassman said. Representatives from Cox Communications and Qwest said they just heard of the proposal. Cox spokesman Michael Dunne said Cox wants to work with the City Council but needs more time to look over the proposal before commenting. Qwest spokesman Mark Molzen said the company is "concerned about any type of tax or fee that would impact our customers," but he added that the proposal is still in the discussion phase. The proposal also applies to all wireless companies, Finance Director Silvia Amparano said. She added she didn't know if Internet service would be taxed as well. Letcher also provided a second option for the budget that included a 0.5 percent renters tax that was proposed by Uhlich. The proceeds of the renters tax would go toward increasing the city's reserve fund another $4.7 million, making the reserves 4.9 percent of the city's budget. Although a majority of the council has raised concerns about the renters tax, Uhlich said she wants to talk about it and hear from the public. "It would probably be best to continue the public dialogue on the rental tax," Uhlich said. Proposed taxes and fees --A 2 percent increase in home phone and cell phone bills for Tucson city residents because of increased taxes on companies providing those services. --A 2 percent tax on Tucsonan utility companies such as Tucson Electric Power and Southwest Gas for their use of the city rights of way. The utilities are legally allowed to pass those costs on to customers. --An approximately 10 percent increase in Tucson Water bills. --A 3.5 percent increase in the city's garbage fee, to raise it from $14 to $14.50 a month. --A $1 increase in the bed tax paid by visitors spending nights in hotels and motels in Tucson. --A new tax on gym and health-spa memberships, likely to be passed on to patrons. --A new tax on tanning salons. Contact reporter Rob O'Dell at 573-4346 or [email protected]. To see more of The Arizona Daily Star, or to subscribe to the newspaper, go to http://www.azstarnet.com. Copyright (c) 2009, The Arizona Daily Star, Tucson Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |