Friday, February 04, 2000
Schools urged to back TV tax reform
Some fear loss of revenue
BY ANDREA TORTORA
The Cincinnati Enquirer
ERLANGER — Northern Kentucky's largest cable TV provider asked school superintendents this week to support tax reform that would create a flat tax for the telecommunications industry.
Jim Stewart, senior vice president for Insight Communications, said the 6 percent excise tax could mean more revenue for schools and lower bills for some cable customers.
It would generate $94.7 million in 2001 and 2002.
“We don't want to see the schools hurt by this tax,” Mr. Stewart told the monthly gathering of Northern Kentucky superintendents in Erlanger. “I'm hoping I can get your support.”
Schools and cities across the state are hashing out details of the measure, included in Gov. Paul Patton's Revenue Fairness and Recovery Program.
They fear a revenue loss if there is a switch to a flat tax with a streamlined collection system operated by the state. The cost of such a collection system could trigger the revenue loss, they fear, and the money also would go to the state before coming to schools.
The telecommunications industry wants one collection system to replace the individual systems in cities and 155 school districts with a utility tax.
Such a move could make it easier to get payments from out-of-state companies. The excise tax also would include providers of satellite TV and other companies with “intangible” property. That's because the proposed excise tax would replace intangible property and school gross-receipts taxes, and franchise fees.
“This is probably something that has to occur for telecommunication companies to survive and compete,” Kenton County Schools Superintendent Susan Cook said. “But it's probably not the best for schools.”
The Kentucky School Boards Association said it will support the excise tax only if legislation protects school funding.
Brad Hughes, association spokesman, said the group wants schools to benefit from any industry growth. The association also wants to make sure schools will receive the same level of funding they get under the current tax structure.
The 21 school districts in the state without a utility tax could be able to receive money from the excise tax several years after its implementation.
Insight cable customers would not see an increase on their bills and could see a decrease if the measure passes, Mr. Stewart said.
Customers now pay franchise fees and other local taxes on their cable bills. Those fees total more than 6 percent in some areas. The excise tax would replace those fees.
Municipalities without franchise fees and other local taxes would see a drop in cable service charges to ensure rates do not increase because of the excise tax, Mr. Stewart said.
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