CUB Speaks to California Legislators About Utility Tax Fairness
Posted on April 26, 2007 by oregoncub
Tags, Utility Regulation
Following the successful passage of SB 408, the 2005 (hotly debated) utility tax reform measure, Oregon has come to be seen as a national leader on the issue of utility taxes and CUB as its resident expert. Along with interviews with reporters from the New York Times and other national media, CUB staff members have also spoken with numerous consumer advocates around the country who are beginning to grapple with similar issues.
Such was the case last week when advocates of a California utility tax reform measure flew CUB Executive Director Bob Jenks to Sacramento for a hearing before the California Legislature on AB 1517, a bill which attempts to align utility taxes paid by customers to those paid by companies to the government.
The groups behind the bill include TURN (a utility watchdog organization similar to CUB), along with the AARP, and the Utility Systems Director of the South San Joaquin Irrigation District. Aligned against the bill were all the big utilities in California, who brought on their behalf what someone described as “the most powerful contract lobbyists in the state” to work against the bill.
“What to me is exciting about this situation in California,” said Bob Jenks, “is that we passed our utility tax reform bill here in Oregon only after the debacle with Enron. Now we are hearing from advocates in a number of states that they are using the passage of SB 408 as a springboard to re-examine how utility taxes in their states are calculated. In California, they came to the same conclusion we did here, which was that treating utilities as stand-alones, when they’re not, forces customers to pay more than they should.”
You may remember from reading CUB’s in-depth coverage of the SB 408 battle that utility companies such as PGE under the ownership of Enron, had been passing along customers’ tax payments to their parent companies, who then took a tax write-off on unrelated corporate losses. The Oregon utility customers’ tax payments wound up lining corporate coffers. Shareholders were benefiting, but nobody else: Customers never got a refund and government entities never got a check.
Again, from Bob: “Part of what I tried to do for the California committee was dispel some myths about the bill that had been created by PG&E (not to be confused with PGE) who suggested that the Legislature in Oregon has created ‘substantial financial uncertainty for utilities.’ That is simply not the case—we just closed a popular corporate loophole.” As CUB made clear here in Oregon (and Bob testified in California), “Customers should only pay for their reasonable share of consolidated corporate costs whether those costs are for the CEO, the shareholders, or for taxes.”
The utility tax reform we helped write and pass in Oregon was fundamentally about fairness, and allocating resources appropriately. We are happy that other states are beginning to address the fairness issue with regard to their own utility taxation, and we’re glad that we are able to speak on behalf of fair utility tax laws here and elsewhere.
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03/10/17 | 0 Comments | CUB Speaks to California Legislators About Utility Tax Fairness