Taxing telecommunications in Virginia
Guest post by Duront Walton, the Executive Director of the Virginia Telecommunications Industry Association
For the past few years, the Virginia Telecommunications Industry Association has worked with the General Assembly to make telecommunications taxes transparent and user friendly to the Virginia taxpayer. Simply put, that means you should be able to understand what the taxes you see on your phone and cable bills are actually for. This was a very complicated process that took years of the General Assembly, localities and industry working together to reform the system. Ultimately, we successfully cleaned-up and standardized the telecommunications taxes, both statewide and locally, and modernized them to be technology-neutral so the same mess could be avoided in the future. The result really sets Virginia apart from most states that continue to deal with a messy patchwork of taxes.
One tax on your home and wireless phone service is the E-911 tax. This funds 911 call centers around the state and ensures that regardless whether you call from home or from a cell phone anywhere in the state you get connected to the nearest 911 call center.
An E-911 tax that funds 911 call centers makes sense. What doesn’t make sense is a hidden tax in the Virginia Senate budget proposal that raises the E-911 tax by a whopping 24% then diverts the revenues to fund a separate and unrelated program.
As an industry that has endured our share of economic challenges recently, we are not unsympathetic to the challenges the fiscal Commonwealth faces. However, we do believe that even in tough times Virginia’s government should be transparent in its effort to address budget shortfalls. That is why our organization so strongly opposes proposals to raise the E-911 tax by creating a surcharge on all wireless and wire line telecommunications consumers for a purpose that is unrelated to the current fee and the program it supports. As we view it, this new tax uses our member companies to collect new tax revenue, as though it is related to providing emergency service, and then betrays the trust of the citizens of Virginia by diverting it to a program that does not support the E-911 system at all.
A little background on this:
This is a union bill that firefighters have pushed each year to increase state contributions to the “line of duty fund.” The fund, in and of itself, is a very worthy project that makes payments to the families of first responders who are killed or injured in the line of duty. But those covered under the Line of Duty statute include everyone from game wardens to state hazmat teams to the Virginia Marine Resources Commission. All of these are noble and important offices, but there is hardly a connection between their job and a 911 communications infrastructure.
No one takes issue with the merits of the fund. Senator Fred Quayle (R-Chesapeake) has introduced a bill that adds this tax onto home security systems each of the past four years. It’s failed every year because the General Assembly didn’t feel there was enough of a nexus between security systems and the fund to link the tax. Quayle refused to carry the bill again for a 5th year. As a tip of the hat to his union buddies, Governor Kaine included the tax in his budget, placed it on all Virginians who have a home or cell phone, and then promptly left town.
The House of Delegates stripped the language out of their proposed budget and killed several bills that proposed to implement this through a change in statute. The Virginia Senate, on the other hand, left it in their budget.
All Virginians understand the grave situation that faces the Commonwealth, but if it is the will of the Governor and the General Assembly to create a new tax and a specific revenue stream to support the Line of Duty Program then they should do so honestly and openly. Governor Kaine contended that there were no gimmicks in the budget that he left. This item is just that – a budget gimmick that betrays the taxpayers trust.
Taxpayers, businesses and government are all in the same boat navigating the same rough economic waters. We all need to be open about the problems we face and honest about the solutions no matter how difficult. If a budget passes with this hidden tax increase in it, I fear we are beginning a long journey backwards.
This tax is nothing more than a shell game and Virginians deserve better.
Category: Government
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[...] Drift has a terrific guest post up by Duront Walton, Executive Director of the Virginia Telecommunications Industry Association. Mr. Walton addresses [...]
Telecommunications lobbyist against taxing telecommunications industry. Stop the presses.
Dear guest poster (Noted to be hiding ones name),
I personally wrote that “union” bill as a method to fund the Line of Duty fund outside of the General fund. I feel it is a better and fairer method to refund/provide funds to the localities and the families of dead/fallen in the “line of duty” public safety members. Given your comments, let me explain why I choose this method.
The alarm protection system companies benefit from the use of the local police, fire and ambulance services for free. Your clients pay you for a monthly service that every taxpayer funds for ALL citizens thru local taxes. Your clients then receive a “personal service” when their alarm activates. An alarm goes off and you call 911 and the emergency response police, fire and EMS respond for you at no cost. The regular taxpayer without an alarm system, has to stand in line (relative term) while your clients needs are met first. That “personal additional service” costs your clients a monthly fee, yet you return nothing to the localities in return for their public safety funding. In Virginia Beach as an example, the citizens fund approximately 130 million a year for public safety. You get yours for free and return zero dollars on that investment. Not a bad deal for you and you clients.
IMO: You could hire a private response force or security staffing to respond to your business and clients but instead you use the taxpayer funded forces. But that would cut your profit. Why should every taxpayer fund your alarm service while you keep 100% of the profit? So why should your business receive a free work force while the taxpayers fund them? It simply does seem right to me that your alarm business has thousands of first responders assisting you, yet you do not have to pay a responder payroll, worker’s comp or equipment and insurance for those thousands of responders. You get it free and you keep 100% of the monthly service fees. That is why I ask the union to push this bill. You can blame a union for this but it is your own abuse of the local emergency responders that you should blame.
FYI: I have an alarm system in every home I own and I pay the monthly fee. I am a recipient of the special service of my alarm company while the regular taxpaying citizen gets a lesser degree of emergency response. I don’t believe it is too much to ask you to return funds based on your abuse of the local police, fire and ambulance departments and the taxpayers.
Mr. Bailey, why are you accusing Mr. Walton of “hiding one’s name”? His name is listed right there at the top of the article.
Mr. Vaughn, aren’t people who are going to be taxed allowed to speak against the concept?
I put my name on my comments and I felt “guest post” wasn’t the same. I can see if one doesn’t post here on a regular basis the “guest post” tag would apply. So I’ll take the beating for that one.
As to speaking for or against a bill, it is up to the Committee Chairman to allow or cut off the speakers and limit the comments.
Mr. Jams,
Sure. In this case, he’s a paid mouthpiece for the people who are going to be taxed. But he’s allowed to speak. The rest of us are allowed to take it with a grain of salt. That’s all.
Hey Will-
This is talking about the E911 tax that the Senate wants tacked on to phone bills, not an alarm tax. From his letter, it doesn’t appear they oppose this on the merits of the fund, but on how it’s taxed. Did you miss the whole piece on transparency? Why not fund it outright in the general fund if lawmakers feel it’s a worthy stand alone expense? Seems like that is all Mr. Walton is saying here.
Sorry about the delay in response as I was offline for a couple days. I understand where the tax is to come from and it is only .05 cents. It isn’t much. I was the author of bills but I have not had a hand in the recent budget part of this issue. I just wanted him to understand his role in the creation of the bills and the direction the issue has taken.
And I clearly understand the “Guest Poster’s” support for the issue of public safety line of duty funding but it is his associations abuse of the local taxpayers and the 911 system that I find to be the related issue. Everyone loves cops, firemen and other public safety folks until they have to fund thier public safety needs then nobody wants to pay…