May 07--HELENA -- Charter Communications on Tuesday cleared its last hurdle to begin gathering signatures for a ballot measure intended to reverse a large property tax increase on the company.
Secretary of State Linda McCulloch issued the final petition to the proposal's sponsor, Christopher Fulton, vice manager and general manager of Charter Communications, in Billings.
Attorney General Tim Fox has approved the legal sufficiency of the initiative to reclassify cable companies' property tax valuations.
The proposal, called Initiative 172, targets a decision by the state Revenue Department to reclassify the property owned by Bresnan Communications, a previous owner of Charter, which offers cable television, Internet and telephone service.
In December, the Montana Supreme Court upheld the Revenue Department reclassification in a challenge filed by Charter against the Revenue Department.
As a result, the company's annual property taxes rose by 329 percent, from $1.7 million in 2009 to $7.3 million in 2010.
A Revenue Department audit in 2008 concluded that Bresnan's division of its property into three separate entities--voice, cable and Internet -- didn't properly reflect the company's actual use of the property. The department assigned all of Bresnan's property to a classification with a 6 percent tax rate.
In the past, the company's cable TV was in a class with a 3 percent rate, with its telecommunications services in a classification with a 6 percent tax rate.
To qualify for the November ballot, backers of I-172 must obtain the signatures of at least 24,175 registered voters by June 20, including 5 percent of the voters in 34 of the 100 state House districts.
On Monday, a new group, Big Sky Broadband Coalition for Lower Taxes, filed as a ballot issue committee in favor of the initiative. Its spokesman, Chuck Denowh, a Helena political consultant, issued a statement in support of the ballot measure.
"A recent ill-advised Montana court decision is a direct hit on Montana consumers and businesses," Denowh said. "This decision puts a massive, permanent, retroactive 300 percent tax increase on Montana's largest broadband provider and subscribers. This is a terrible precedent and can only hurt Montana consumers and businesses."
He said the coalition of individuals and businesses wants to ensure that Montanans have access to affordable broadband. When Montanans learn of the decision, Denowh said he's confident a strong, diverse coalition will line up behind I-172.
"Affordable broadband is a key ingredient of the vibrant technology community that a lot of Montanans would like to see grow in our state," Denowh said. "Second, many Montanans are concerned about Montana's reputation as a good place to do business. And finally, a lot of consumers will feel the impact of this tax in their pocketbook."
Last month, Sarah Cobler Leow, executive director of the Montana Budget and Policy Center, criticized the proposed initiative. She warned that its passage could raise property taxes on homeowners and small businesses in more than half of the counties in the state.
"If the initiative passes, our schools and other essential services would be threatened by Charter's refusal to pay its fair share toward our state's economic growth," Leow said.
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