Voters in bankrupt Vallejo reauthorized the city’s utility user tax, saving $5.2 million of revenue for the city’s $75 million general fund.
Voters also reelected two City Council members who voted to declare bankruptcy in May 2008. The San Francisco Bay Area city of 117,000 is the biggest municipality since Orange County to seek Chapter 9 bankruptcy protection.
Vallejo and two public worker unions have settled their differences in the case, but the city continues to negotiate terms of reductions in contracts with two other unions and still hasn’t settled with bondholders.
City officials proposed changes to the 40-year-old utility user tax, which applies to telecommunications services, because they were worried that it was vulnerable to a court challenge that could blow a significant hole in the city’s beleaguered budget.
The utility user tax reform measure lowers the rate to 7.3% from 7.5%, while broadening the base on which the tax is imposed to include new forms of communication such as voice-over-Internet protocols and text messaging.
The measure passed with 69.4% of the vote in favor and 30.6% opposed, according to unofficial results published by the Solano County Registrar of Voters.
