Editorial: Keep tax, toss bill

Tuesday, April 12, 2005 | 9:15 a.m.

The franchise tax charged to Nevada Power, Southwest Gas, Cox Cable, Sprint and cell phone companies actually costs the utilities nothing -- the taxes are simply passed on to consumers. In North Las Vegas, Henderson and Las Vegas, individual residents pay, on average, an extra $6.30 a month. This amount, averaging about $75 a year per household, does not have consumers up in arms.

But it is an amount that would have local governments statewide up in arms if the taxes were eliminated, as proposed by state Sen. Randolph Townsend, R-Reno. Those few extra dollars that state residents pay in their utility bills add up to $141 million a year, money that is used by local governments to provide services. The taxes raise an estimated $80 million annually for Southern Nevada governments (more than half goes to Clark County), with much of it used to help fund police departments and the courts.

Governments base the taxes on the fact that utilities use public rights-of-way in installing their lines, pipes and cell towers. Until now, no one has seen the taxes as much of an issue. But Townsend, chairman of the Senate Commerce and Labor Committee, contends that taxpayers see little return for their money. He says the taxes simply drive up the cost of utilities. In a statement that leaves us doubting his grasp of local government services, he told the Sun that "Southern Nevada doesn't need the money."

In reality, as the fastest-growing region in the state and nation, Clark County needs every nickel of its tax money. The proof of that would come if the franchise taxes were eliminated. Either services would be scaled back, leading to protests, or other taxes would have to be raised to compensate for the loss. It's Townsend's bill that should be eliminated, not the franchise taxes.