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Mar. 26, 2005
Copyright © Las Vegas Review-Journal


Legislature to hold hearing on repeal of 5 percent utility franchise tax

By JOHN G. EDWARDS
REVIEW-JOURNAL


Would you be happier if you paid $9 less in utility taxes each month?

State Sen. Randolph Townsend, R-Reno, apparently thinks so. As chairman of the Senate Commerce and Labor Committee, Townsend introduced a bill to phase out the taxes, which add 5 percent to residents' utility bills.

The so-called franchise tax produces about $80 million in revenue for governments in Clark County, and lobbyists for local governments are expected to oppose the bill when the Senate Commerce Committee holds a hearing Tuesday on the measure, Senate Bill 277.

City and county governments collect the tax on utilities that use their streets, alleys and highways for power, gas and telephone lines.

The utilities, however, pass the charges on to customers.

Townsend was in a conference and couldn't discuss the bill Friday, but some local residents were ready to comment.

"I would welcome $9 savings if that really happens," said Scott Cavotta, an investment analyst.

However, he said he doesn't trust Nevada Power Co. to return the money, and he said he was undecided whether Sprint Corp., the dominant local telephone company, and Southwest Gas Corp. could be trusted.

Cavotta said he was bitter about Nevada Power because of a $69 electric bill adjustment he was forced to pay for his late father's estate. He wishes Nevada Power had a competitor.

Brenda Pearson, a teacher, said she could not offer an opinion until she knew how local governments were using the tax revenue and how they would replace it. In any case, "I probably wouldn't notice it" if the tax was eliminated, she said.

A retired woman from Santa Fe, N.M., also wanted to know more about the way governments use the funds, but asked not to be identified.

"Everybody wants to save any money that they possibly can," she observed but then had a second thought. "Actually, nine dollars is not all that great. If it was a bigger amount, I could get real interested."

While the retiree seemed unconcerned about saving about $100 a year in taxes, other Nevada citizens have become angry about smaller taxes.

Some were outraged in 2003 when the Nevada Legislature imposed a so-called Universal Energy Charge on natural gas and electric power bills.

The charge increased the two bills by a total of less than $1 a month for a typical residential household. The money is used to weatherize the homes of low-income residents and to help them pay power and gas bills.

In the summer, the typical Las Vegas single-family, residential customer using 1,800 kilowatt hours of electricity pays $8.71 in monthly franchise taxes, Nevada Power spokeswoman Sonya Headen said.

The average monthly consumption throughout the year for the typical residential customer is 1,250 kilowatt hours, resulting in an average franchise tax hit of $6.14.

The franchise fee costs the typical Southwest Gas residential customer $1.94 a month on average throughout the year, based on 4,500 cubic feet of consumption, spokeswoman Cynthia Messina said.

A typical so-called land-line residential customer of Sprint Corp. in Las Vegas pays 97 cents a month, spokeswoman Vicki Soares said.

That brings the total to $9.05 monthly. A cell phone customer also pays 5 percent on the first $14 of a cell phone bill, or 75 cents.

Under the bill, those taxes would be phased out and eliminated by 2007 both for residential and business customers, she said.






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