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BARBWIRE
by
ANDREW BARBANO

Red meat for conspiracy theories

Expanded from the 1-30-2005 Daily Sparks Tribune
2-4-2005 Comstock Chronicle

It has two of the three numbers of the biblical mark of the beast. If it hasn't scared the bejabbers out of every city hall in the state, it will.

In a rare year when state coffers overflow, a move is afoot to drain untold millions from local governments.

Because the legislative bill drafting process is about as transparent as a bowl of warm mud, fragmental information leads to speculation, the fun part of the sport of politics. So let's see who might benefit from Legislative Bill Draft Request 366.

Right now, all that's known for sure is that the State Senate Committee on Commerce and Labor requested a bill last August which "removes authority for local governments to impose utility franchise fees." The committee chairman is Sen. Randolph Townsend, R-Reno.

Franchise fees are basically sales taxes added onto your electricity, gas, water and cable TV bills. Theoretically, they are reimbursement to cities and counties for allowing use of their rights of way and the costs related to such. I am sure that at some time in the distant past, utilities actually paid them.

Alas and alack, big business always hires the smartest lawyers. A few decades back, some fat cats went to court and won a ruling that imposing any cost on a utility which it cannot not pass through to its customers constitutes an unconstitutional taking of private property. (Utility commissions disallow expenses all the time in rate hearings, forcing them to be charged to stockholders rather than ratepayers, so I guess I'm not smart enough to figure out the difference.)

Franchise fees are now tacked on as separate line items on everyone's bill. The public thus gets stuck with the costs assessed to utilities for using the public's own property. Go figger.

In Nevada, municipalities derive all power from the benevolence of state government, which is why you see cities and counties going to the legislature every two years for seemingly trivial matters. Without permission from the state, Sparks can't even buy paper clips.

BDR 366 may be presented as a more cost-efficient way of centralizing collection for redistribution by the state. That's what happens with most Nevada taxes and explains why local school districts must go the legislature for the lion's share of their budgets.

Nevada cities, counties and school districts are always strapped for money because our tax system does not cover the costs of growth. Two of our three largest employers, gambling and mining, are corporate welfare queens, privatizing profits while socializing risks. Casinos are the worst offenders and I've published the state study proving so at NevadaLabor.com.

Nevada state government gets about two-thirds of its money from Washington, DC. Our gambling, mining and sales taxes rise or fall with the economy and are thus unstable. Property taxes are the one reliable source of revenue upon which municipalities and school districts may depend. (I hope any legislative property tax "reform" includes stopping casinos from getting windfall tax breaks whenever business slides.)

If BDR 366 becomes law, cities and counties will have to politically compete for what has been a fairly dependable revenue source. The proposal represents a tremendous potential loss to local governments, which will undoubtedly oppose it unless they are foolish enough to be bought off by promises of some bonus for letting the state get its hands on that cash.

With respect to cable television franchise fees, BDR 366 may butt up against federal law which allows local governments to levy up to five percent of certain consumer payments, most notably excluding broadband high speed Internet. Electric utilities will have an interest, as we stand at the dawn of Internet transmission via power lines. Anything defined as broadband Internet eludes taxation or regulation. Once the deregulatory camel's nose is under the tent, what's next?

Gov. Dudley Do-Right and State Senate Majority Leader Bill Raggio, R-Reno, have chanted "no new taxes" until both have become blue in the face in this very red state. Glomming onto this huge pot of local money may be their backdoor way of having their cake and eating it, too.

Thanks to Dubya and his rich friends, the university system faces losing well over $200 million per two-year budget cycle from the killing of federal inheritance taxes. Dudley's terminally vague state-of-the-state address announced expansion of state programs coupled with tax giveaways and givebacks. He genuflected to conservatives by screwing newly-hired state employees out of health care in retirement.

How do you make everybody happy if you don't have enough goodies to pass around? How about ripping off hundreds of millions from cities and counties via BDR 366?

This beast will bear watching.

Be well. Raise hell.

SMOKING GUNS Sen. Randolph Townsend, R-Reno, wants it both ways: He introduced a bill to eliminate utility and cable franchise fees while supporting new franchise fees on satellite TV subscribers. Read it and weep. Why television is so very important Nevada Consumer Links How to fight the cable monopoly in your town How to fight the power company in your town How to fight Wal-Mart in your town How to fight the gambling-industrial complex

 

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