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City council moves to slash utility users tax
Prospect of rate increases leads to reversal of earlier decision
By Daniel Hindin
In a reversal of recent action, the Sunnyvale City Council unanimously decided to decrease the municipal utility users tax, saving Sunnyvale residents and small businesses money on their future electric bills.
Last July, Mary Bradley, the city's director of finance, told the council that electricity prices were expected to drop because of deregulation. Because of this projected rate drop and the fact that the city's utility tax is directly related to the dollar amount of residents' electricity bills, she said, the city stood to lose a substantial amount of money-- about $11 million over the next 20 years.
To counteract the potential loss of revenue, the council voted to raise the tax from 2 percent to 2.33 percent, emphasizing that residents would actually end up paying roughly the same amount for their electricity as they had in the past.
This move prompted resident Mark Priscaro at this time to say, "Bradley and the Sunnyvale City Council are making absolutely sure that apparently [Sunnyvale residents] won't ever get a chance to actually enjoy a decrease in our total utility bill--heaven forbid!"
Since last summer, however, the electricity market has gone through dramatic changes.
"Rates have stayed the same [so far]," said Bradley at the March 5 council meeting, "but they will obviously rise in the near future--although we're not sure when."
Because of this abrupt reversal of expectation, Bradley recommended that the legislation, be reversed--suggesting that the new 2.33 percent rate be changed back to the original 2 percent rate.
"It's important to keep faith with the people of Sunnyvale," Vice Mayor Fred Fowler said. "We owe it to them to keep the revenues stable."
Fowler's fellow council members agreed, and the rate decrease passed unanimously. The council will take final action on the change at its March 20 meeting.
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Sunnyvale, California Since 1994
