Bill on franchise fees loses in panel

Friday, April 15, 2005 | 9:13 a.m.

CARSON CITY -- The bill to eliminate $141 million in franchise taxes charged by local governments was defeated in the Senate Government Affairs Committee on Thursday, but its chief proponent said the issue isn't dead.

Sen. Randolph Townsend, R-Reno, said he will make another effort later in the legislative session that goes until June to scrap the tax charged on such items as electric, natural gas, cable television and telephones.

The committee, of which Townsend is chairman, voted 4-3 against Senate Bill 277. Local governments, who opposed the legislation, said about 14 percent of their total revenue comes from these fees. The taxes are capped at 5 percent of the utility bill.

Sen. Mike Schneider, D-Las Vegas, said the Legislature this session enacted a limit on collections from the property tax for local government. To repeal the franchise taxes would be another hit on counties and cities.

Sen. Sandra Tiffany, R-Henderson, said local governments would find another way to make up the lost revenue if the Legislature repealed the franchise fees. "It would be passed on to the consumer again," she said.

The best way to adjust spending, she said, is the Taxpayer Bill of Right in which the public has a say on changing taxes.

Tiffany was the only Republican to join with Democrats Schneider, Maggie Carlton of Las Vegas and John Lee of North Las Vegas in voting down the bill. She said she expected some feedback from Townsend.

But Townsend said he never asked anybody to vote for or against a bill, and he doesn't intend to talk to Tiffany about her vote.

Today is the final day that a committee can pass a bill out. But Townsend would need five of the seven votes to resurrect the bill.

Townsend said he was "disappointed" but respected the committee's decision.

"I believe local government has a responsibility to tell their constitutents if they need more money -- to go get it and get it in the appropriate fashion," he said.

"I am probably not going to let this die. I am going to try to garner some support for some kind of addressing of this issue -- whether it's a longer phase-out or less of a tier down in some percentage."

He hinted he could put an amendment on another bill that may come over from the Assembly.

"You are all very aware of what the game is like and I have been in my share of end games," he said. "Opportunities arise when you least expect them."

Figures given to the committee last week show Las Vegas residents pay an average of $75 per year for franchise taxes, yielding $41 million or 10.2 percent of the budget.

Henderson residents pay an average of $92 annually that produces $21.2 million or 14 percent of the city's general fund budget. And North Las Vegas collects $9.9 million or 9.3 percent of its budget from the taxes that average $60 per resident.

Townsend's bill would have reduced the 5 percent tax to 3 percent this July, lowered it to 1 percent in July 2006 and then eliminated it in July 2007.