Georgia Legislature Wants to Raise Your Taxes

January 27, 2010 17:31 pm

by Erick · 18 comments

Get ready for this one folks.

Senator David Shafer is considering legislation that will scrap the Universal Access Fund on your phone bills and save you some money. The plan is sound and does a ten year phase out.

But a bipartisan group appears intent on muscling in an amendment in the process to not just keep the UAF, but expand it. They tried it last year and came close to succeeding.

You can get some information here on the background of this legislation. Basically, the GOP has been pushing to scrap the Universal Access Fund, a tax on your businesses that subsidizes telecom carriers in rural areas. But for some reason, the big dogs in the GOP keep getting some big businesses to come in, make a few campaign contributions through scantily clad lobbyists, and the GOP leadership keeps trying to increase the Universal Access Fund instead of killing it.

This year the proposed legislation is being pushed by AT&T lobbyists so AT&T can get out from under some payments to rural telecom providers. The proposal would essentially provide $143 million in corporate welfare over the next ten years to rural telephone companies whether or not they need it.

Never mind that Georgia already has an $11 million Universal Access Fund that taxes all wireline telephone companies.

Shafer’s plan is sound. The potential amendment to kill Shafer’s legislation and raise taxes instead is ridiculous.

Jeff January 27, 2010 at 8:44 pm

My source says a draft doesn’t even exist yet…

What I am being told is that tomorrow’s Regulated Industries Committee meeting is designed to discuss these issues and let both sides try to hash out something that can be written into a bill.

Apparently, the ATT folks (and I HOPE I’m getting this right) are trying to ramp up the fee while phasing it out over 10 years. Apparently, the GGA is legislatively forcing down the rates rural telecom companies can charge. ATT feels (again, per what I am told, and I’m HOPING I’ve got what I was told straight in my own head here) that the rural companies are benefiting from the lower rates at ATT’s expense, and so ATT is attempting to raise the rate slightly while still phasing it out over a decade, in a corporate welfate-type attempt to make up the money they feel they are entitled to.

Again though: No “plan” currently exists. One could emerge following tomorrow’s meeting, but that is unclear and uncertain at this point.

Archon January 28, 2010 at 10:30 pm

There has been language around for weeks. But it appears the pressure of not wanting to raise taxes, aka fees, has gotten to the committee and its chairman so now they are going to try and bury them in the bill.

Provocateur January 29, 2010 at 11:11 pm

Is this the same committee chair responsible for SB-31′s language last year that exempted the commercial and industrial customers of Georgia Power from having to pay for the new nuclear plant?

Republican Lady January 27, 2010 at 9:19 pm

Well, I guess I need to beg and plead with everyone to help me find a full-time job in this frozen market so I can give up my part-time teaching gig to have money to pay for these changes.

B Balz February 1, 2010 at 9:32 am

That is a cute llaso!

AthensRepublican January 28, 2010 at 12:26 am

Letter to the editor in Tuesday’s Macon Telegraph about this issue:
http://www.macon.com/203/story/997856.html

MouthoftheSouth January 28, 2010 at 12:04 pm

Erick,

I don’t think your understanding of how the UAF works is correct. Do a little research and re-edit the post.

ByteMe January 28, 2010 at 12:59 pm

You’ll probably need to do the research for him (and us), so why not just tell us what you know?

analogkid January 28, 2010 at 2:35 pm

I’ll take a shot at it…

The UAF was created for the purpose of ensuring that every person in Georgia has the ability to make a phone call to anyone else with a phone. Current State law is based on the idea that the cost of phone service in rural areas per line is higher than in urban areas (due to fewer customers and greater distances between them) and “subsidizes” those companies. Whether or not universal service or affordable rates for rural customers is a good thing is a matter of opinion. The thing to take away from this is that the UAF (as it is right now) is a “High Cost” fund, meaning its only purpose is to mitigate higher costs in rural areas.

Last year, HB 168 was passed by the House but stalled in the Senate. That bill would eliminate the UAF “High Cost” fund in its entirety. There was no 10 year phasedown.

A second bill, HB 376 (which was not passed last year) also eliminated the “High Cost” function of the UAF, but it created an entirely new mechanism called an “Access Fund”. The purpose of that fund would be to reduce the per-minute rates telephone companies pay each other, called “access”. Rural telcos would have to increase local service rates, reduce access rates, and the difference in revenue, if any, would be made up by the UAF. The Access Fund would be phased out in 10 years.

Shafer’s bill (which I have not seen) apparently eliminates the “High Cost” fund in 10 years, rather than immediately. His bill also creates an “Access Fund” similar to HB 376, which is phased out at the same time as the “High Cost” fund.

As it stands right now, only wireline carriers pay into the UAF. Whether other providers should pay into the UAF is the subject of debate.

Additionally, the companies who pay in are not allowed to put a surcharge on customers’ bills. The companies’ contributions are built into monthly service rates. There is talk of allowing a surcharge so that customers can see how much the subsidy is.

Hope that helps.

David Staples January 29, 2010 at 9:12 am

Hrmm, I guess I’m confused. I was getting the UAF confused with the FUSC I guess – Federal Universal Service Charge. From the online billing portion of Verizon Wireless:

Verizon Wireless’ Surcharges include charges to recover or help defray costs of taxes and of governmental charges and fees imposed on us, including a Regulatory Charge (which helps defray costs of various regulatory mandates, including government number administration and license fees) and a Federal Universal Service Charge (and, if applicable, a State Universal Service Charge) to recover costs imposed on us by the government to support universal service, and may include other charges also related to our governmental costs.

David Staples January 28, 2010 at 1:17 pm

Perhaps AT&T hasn’t yet realized that many people are scrapping their home phones in favor of wireless. Or maybe they’re not reading their own earnings reports (along with Verizon’s). (I’d say Sprint as well, but Sprint has lost customers every quarter for more quarters than I’ve kept up with now…)

Wireless deployment costs are still quite high, but nowhere near the amount required to string fiber / copper to each and every individual house in these rural areas. These deployment costs are especially lower in south Georgia where the landscape is relatively flat. The radio waves (RF) can travel in a good 5 mile radius in the 800 MHz spectrum (for those in the A and B channel) and roughly 3 miles in the PCS band (1.8 – 1.9 GHz). As the major wireless companies continue to grow, is it really a wise idea to tax consumers and give the money to wireline companies deploying outdated (or soon to be) technology?

Archon January 28, 2010 at 10:34 pm

It is really depressing that conservatives, or those we have believed to be conservatives, will sell out in a matter of seconds and raise taxes. And to make it worse these so called conservatives will raise fees on working men and women to help one big company pay off a bunch of other companies. This isn’t “tele-welfare” this is robbery by the king and his princess to pay for more land.

It is time the conservatives at the capitol start to go back to their core values and lead from there instead of from the back of the Lobbyists G5

scott2121 January 29, 2010 at 10:58 pm

This is a joke–the legislature is going to be bought out by AT&T to the point that they think its a good idea to promote taxes on our cell phone use just to subisidize land lines. Great idea. Send us back a decade just for a few campaign contributions.

Goldwater Conservative January 29, 2010 at 11:49 pm

That is capitalism scott2121.

punditree3 January 30, 2010 at 11:02 pm

I’m sure Adam Smith himself couldn’t have imagined a more shining example…Scott is right and you’re right: This is a pretty open case of one wireless co. flooding campaign coffers to get what it wants. Sure. But if you’re going to do that, how bout pick a worse time to take away people’s money to pay for crappy policy…like a recession.

Oh wait…

IndyInjun January 30, 2010 at 12:20 pm
Icarus January 31, 2010 at 5:14 pm

Indy, I’ve been very tolerant of your threadjacks this past week as well as given you a number of threads to go Weymar Republic all over the place here.

This is your last warning. This thread is about a specific bill. Your post has nothing to do with whether or not there should be a change in the Universal Access Fund.

Learn to stay in the proper lane, or find another blog to bleed doom all over.

Kerry1515 January 30, 2010 at 8:49 pm

This idea strikes me as terrible. I’m not sure what the legislature is thinking, but these are not the times to raise taxes. Many of us are having a hard enough time already with the economy in the shape it is in. As far as i am concerned, raising taxes on modern cell phones to pay for century old antiquated land lines is good for the legislature and bad for the rest of us.

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