Revenue reduction

Loss of cell phone tax reported

The failure last fall of the passage of Measure J, which would have allowed the city of Chico to continue collecting a cell-phone user-utility tax, is costing the city about $70,000 a month in lost revenue and will amount to $840,000 after a year.

That information was presented by city Accounting Manager Frank Fields at the May 28 Finance Committee meeting, during an update on the city’s dire financial state.

On top of that, 183 cell-phone users have filed for tax refunds from the city amounting to $9,100, or about $151 each.

Measure J was placed on the ballot to update the city’s decades-old ordinance to include cellular and certain Internet phones, not just land lines. The city had already been collecting the fee from cellular providers, but the measure would have codified the practice. Measure J actually would have reduced the overall user-utility tax from 5 percent to 4.5 percent. But it was defeated by 54 percent of the voters.