Portland, Keizer eye cell-phone taxes

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Portland & Keizer eyeballing additional telecom taxes without public vote
By Pac-Tech Alliance,

Both citing declining revenue from traditional wireline taxes the cities of Portland and Keizer have announced they are considering additional taxes on wireless telecommunications and other utilities without a public vote (even though voters have challenged or rejected similar increases in other Oregon municipalities).

In the city of Keizer, according to a staff report, a decline in franchise fees from local utilities, cable and telephone companies is a major reason the city council has begun work on a Master Telecom Ordinance.  They’ve also appropriated $10,000 for outside legal counsel’s help.

According to the staff report, fees from local telephone companies fell by over $40,000 in just two years.  The report suggests one possible solution; a registration fee on all telecom providers.  The city has acknowledged there may be some pushback on the issue, but according to Councilor Richard Walsh, “I’m in favor of this, but I think we should be aware…we’re starting a fight.” *

A similar situation is brewing in Portland; also citing a decline in wireline revenue, the city is considering new utility taxes to make up for the shortfall.  In a recent auditor’s report, staff noted that if wireless companies pay just a business license fee it will generate $250,000 for the city, BUT if the city was to levy a utility fee of 5% on gross revenue it will generate $11,500,000 (or 46 times the revenue) for the city.** The report notes that “the impact of this inequity is a loss of revenue to the city…”*** and has recommended that the city remedy the inequity and update cable communications and franchise management codes.  The report also acknowledges that in other Oregon cities similar proposals have faced a referendum and the proposal was either defeated or withdrawn, but still recommends Portland move forward.

* Keizer Times 9/22/09
** Utility & Franchise Revenue: Equitable tax and consistent approach needed to improve collections, Report from the City Auditor May 2009, page 14, figure 3
*** Utility & Franchise Revenue: Equitable tax and consistent approach needed to improve collections, Report from the City Auditor May 2009, page 15, paragraph 2

Portland Auditor’s report:
Keizer Times Story: