Gazette opinion: Initiative won't lower cable bills

2014-06-12T00:00:00Z 2014-06-13T17:32:08Z Gazette opinion: Initiative won't lower cable bills The Billings Gazette
June 12, 2014 12:00 am

Two weeks ago, a Gazette opinion urged Montana voters to scrutinize Charter Communication’s effort to cut its taxes by proposing Initiative 172.

After talking with four Charter executives from around the country and the Montana consultant hired to help get the initiative on the Nov. 4 ballot, the Gazette editorial board stands by our May 31 editorial and offers voters a different perspective than the one presented in Charter’s guest opinion printed elsewhere on this page.

Charter asserts that its taxes were raised unfairly. In fact, the company’s Montana taxes have not been raised since Charter bought it and were not raised when Optimum owned it. The tax reclassification was completed in 2010 when the business was owned by Bresnan Communications. Charter knew its Montana tax liability when it invested here. Furthermore, the company’s tax classification as a telecommunications company has been upheld by the Montana Supreme Court. Charter, a large company that operates in 29 states, is now asking the voters of Montana to cut its taxes by changing the law for one company and overruling the state’s high court. The initiative proposes to cut both future taxes and retroactively relieve Charter of tax liabilities dating back to 2006.

We want to see everyone pay the least amount of taxes allowed by law. But when it comes to property tax breaks, Montanans are all in it together.

The largest share of property taxes go to local schools, which must set budgets according to state law and levy a tax to collect the dollars. When some taxes are paid under protest, the schools (and cities and counties) receive less than their full budget. Under certain conditions, schools and other entities can spend protested taxes, but they would be liable for repaying the money if the taxpayer’s protest (or initiative in this case) is upheld.

Going forward, when one taxpayer gets a tax break, that lowers the total value of property in a city or school district, so the levy is higher for everyone else to generate the same amount of tax revenue.

Tax breaks can help encourage community investment, such as the 10-year tax reduction Bresnan received when it built its Billings operations center.

According to the Montana Department of Revenue, I-172 would:

Decrease state general fund revenue by about $1.1 million per year.

Decrease Montana University System revenue by about $72,000 per year.

Retroactively reduce state general fund by $10 million and reduce MUS by $645,000.

Cost local governments about $55 million in protested and delinquent taxes and shift about $6 million annually in future tax liabilities to other local taxpayers statewide.

Big Sky Broadband Coalition for Lower Taxation is promoting I-172. As of last week, the “coalition” was one entity, Charter.

If you have been asked to sign an I-172 petition to lower your cable bill as some Billings folks have been, know that’s not what the initiative would do.

Chuck Denowh, spokesman for Big Sky Broadband Coalition, says signature gatherers are supposed to say: “This is about preventing an increase in what people pay for cable and broadband.”

When signature gatherers ask us to sign for I-172, they are asking us to support a huge tax break for a company that has been in Montana for just a year and wants to overturn a Montana Supreme Court decision. And, yes, I-172 would make the rest of us pay higher taxes.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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