Corvallis voters will have a say on the so-called phone tax after all.

On Wednesday, the Benton County Elections Office confirmed that a referendum calling for a citywide vote on the City Council decision last month had qualified for the September ballot.

Opponents of the 5 percent business tax on telecommunication services providers, including cell phones, residential lines and long-distance companies, needed to collect the signatures of 1,684 registered Corvallis voters. Last week, they submitted 3,887 names.

When signatures were verified by the elections office, one-third of the signatures processed were not valid, for reasons such as the person wasn't registered to vote or is not a city resident. However, paid signature gatherers hired by Verizon Wireless collected more than enough, 1,879 names, to refer the measure to voters for the Sept. 19 election.

"We're pleased about the news," said Richard Kosesan, a representative of Verizon. "This demonstrates a large number of individuals were concerned about the implementation of the new telecommunications tax."

Kosesan said Verizon would work with local interests on a campaign to repeal the tax.

Now that the referendum is certain, the City Council will meet July 5 to discuss whether to put a moratorium on the tax, which takes effect Sept. 1, until after the election, said City Manager Jon Nelson.

"We suspect they will direct us to change that date based on the September ballot," Nelson said.

Taxpayers will foot the bill for the election, a cost estimated between $20,000 and $28,000, depending on whether a voters' pamphlet is published. The city referendum looks to be the only local measure on the September ballot. The phone tax referendum is the first in Corvallis in 15 years.

On May 15, the council voted unanimously to implement the phone tax, which lowers the tax rate residential phone companies already pass along to customers from 7 percent to 5 percent, and establishes the same rate for all telecommunication service providers, including cell phone companies.

Cell phone companies do not currently pay local taxes.

After a public outreach process, the council approved the tax as a new revenue source to pay for fire department services, including a new training tower and replacement emergency response equipment.

While the business tax is directed at phone companies, it's expected to be passed along to customers. For a $50 monthly phone bill, the tax would $2.50.

City officials estimate the tax would generate about $700,000 a year in revenue, an increase of about $426,000 over what the city already receives in revenue from the 7 percent franchise fee on land line telephones providers.

Industry representatives have said those estimates are too low, and had lobbied city officials to consider a general business tax as a more equitable way to pay for city services.

After the council passed the tax, a coalition of phone service providers worked with the chief petitioner Brian McElligott, a Corvallis resident, to hire a company to collect signatures for the referendum.

City officials said that the alternative to the phone tax is to cut other general fund services, such as the library or parks and recreation to pay for the fire department's most urgent equipment and training needs. Officials had sought the limited business tax on telecommunication companies to recoup some of the revenue from franchise fees it's lost as more people give up land lines and opt to use a cell phone only. The phone tax was preferred over to asking voters to raise property taxes and it could be implemented administratively, without a city wide vote.

Rebecca Barrett covers public policy and education for the Gazette-Times. She can be reached at rebecca.barrett@lee.net or 758-9510.