In his remarks at the Municipal Partnership Act rally at the State House on Thursday, Patrick pretty much destroyed any argument Verizon might have for hanging on to their 1915 telephone pole tax exemption. Below Boston got the transcript:
Now, the final step: the MPA proposes to eliminate a 92year old law. Exempting phone companies from paying the same property taxes that the rest of us pay. That law was written in 1915 to expand telephone coverage in Massachusetts. In fact, to create universal telephone coverage in Massachusetts. Now with communities everywhere all over the commonwealth struggling to fund services, homeowners struggling to pay property taxes, I think it’s time to retire that law. It’s done its job.
This old law just makes no sense today. It did once. It doesn’t now. You and I pay property taxes. Most other businesses pay property taxes. the electric company pays property taxes on it’s poles – even the same poles by the way that it shares with the phone company. So understand the point. The electric company pays property on the same poles that the phone company does not. No-one is asking that the phone company to do more than to pay its fair share.
Now, the phone company claims that if they have to pay what everyone else has to pay, they will raise our rates, cut jobs, and slow down the broadband investment which is hugely important particularly for western Massachusetts. I just don’t buy it. And neither should you.
Let’s look at the facts. Here are the facts: from 2003 to 2005 while your and my homeowner property taxes steadily rose, the phone companies? total Massachusetts tax bill went down almost 46%. Over that same time period our average monthly phone bills went up almost 30%. There is no correlation between taxes paid and rates charged. If there were they would have passed that savings on to us as phone company consumers. It hasn’t happened.
Here are the facts: the fact is Verizon pays higher taxes in Texas, Washington, New Jersey, California and others. Guess what? In those places rates are lower than rates are for us here in Massachusetts. They charge less where they pay more taxes it turns out. Let’s focus on the facts. No other state has this kind of property tax exemption for the phone companies. And yet employment has grown in all those other states. Not fallen off as they threaten here. And as for that claim about broadband investment, we’ve had this law for 92 years. We still don’t have broadband investment in the western part of the Commonwealth.
The fact is, we are going to have to deliver on broadband access in the western part of this commonwealth and all across the commonwealth without waiting for the phone company.
There’s a really important pattern here that it’s important that we be able to identify when we see it: Government tries to raise revenue from business; business warns that it will have to raise prices to compensate.
Please. It just doesn’t work that way. Sellers raise prices if and when a.) consumers decide they’ll bear the costs, or b.) they’re allowed to do so by the government, as in the case of highly regulated industries like utilities, or auto insurance in MA.
I’m not saying that costs and prices are totally disconnected, but they’re not directly causal, either.
UPDATE: Joan Vennochi’s got a lot more on the “We’ll leave the state!!!” refrain.