Copyright 2004, San Mateo County Times

First Amendment experts says South City billboard tax is unconstitutional

(San Mateo County Times 11/104) -- The city's plan to tax billboard companies would not withstand a legal challenge, even if it succeeds at the polls, a top First Amendment expert said.

Professor Lawrence Tribe of Harvard Law School, who argued for then-Vice President Al Gore in Bush v. Gore before the Supreme Court in 2000, wrote an opinion about the proposed tax for the Outdoor Advertising Association of America.

"The leading constitutional scholar in American gave at least seven reasons why it's unconstitutional," said Michael Colbruno, vice president for governmental affairs for Clear Channel Outdoor, one of the companies targeted by the tax.

If passed by two-thirds of voters Tuesday, Measure J would require all out-of-town billboard operators to pay

8 percent of gross receipts to the city, estimated at between $130,000 and $500,000 a year. The funds would pay for city services such as police, fire, libraries and parks.

Clear Channel Outdoor and Viacom Outdoor have said they will sue if the tax is approved.

Senior Assistant City Attorney Kim Johnson said the city believes the tax will hold up if challenged in court.

In an opinion provided to The Times, Tribe wrote that: "I find that I have no choice but to report my conclusion that Measure J abridges the freedom of speech on its face, and does so in a manner that I believe violates the First Amendment as applied to the states through the Fourteenth Amendment."

Tribe did not return calls nor an e-mail seeking comment.

Tribe, who was paid for his opinion, cites issues of unfair taxation and free-speech violation in his six-page opinion.

He argues that the tax unfairly singles out billboard operators to pay a higher business license tax than other businesses. Most local businesses pay a license tax of $75 per year plus $5 per employee with a cap of $1,000, said Finance Director Jim Steele. However, there are exceptions: Commercial parking lots pay 8 percent of gross receipts, and hotels currently pay 8 percent of room rates.

Other legal scholars agree with Tribe's argument.

Peter Scheer, executive director of the California First Amendment Coalition, said the tax is "highly questionable" because it unfairly targets billboard operators, specifically those that are owned by out-of-towners and violates First Amendment principles.

Professor Jesse Choper of UC Berkeley Boalt Hall School of Law said he thought the "city was swimming in troubled waters" with the tax.

Mayor Karyl Matsumoto said that the city's finance and legal departments researched the tax, looking at case law and similar taxes. But she said that if the tax passes and new research, such as Tribe's opinion, shows it might be vulnerable to a lawsuit, the council might opt not to implement the tax.

"We're certainly not going to put the city in jeopardy," she said.

Colbruno estimates it would cost the city $500,000 to defend a lawsuit -- more than it would raise in a year from the tax. City Attorney Steve Mattas has said he could not speculate on costs.

Colbruno said Tribe's opinion on the case bolstered the industry's conviction that the tax is unconstitutional.

"It will never stand up in court, and one way or another, we'll prevail," he said.

By Emily Fancher