COLUMBUS — It may cost more money to keep that landline telephone in Columbus.
The city is considering raising the occupation tax for telephone companies from 3 to 5 percent so it matches the tax currently charged to cable companies and provides an additional boost to the general fund.
Finance Director Anne Kinnison said the hike would “simplify things” by setting the tax rates for telephone and cable companies at the same level. With merging technologies, Kinnison said many companies now offer cable TV, internet and telephone services, making it difficult to categorize the providers.
Revenue from the cable and telephone occupation taxes, which are tacked on to a customer’s bill, goes to the city’s general fund. Kinnison said the city will need additional money in that account next fiscal year to cover expenses associated with hiring a full-time fire chief and taking over senior citizen services at the community center.
“It seems like there’s always more things to spend money on,” Kinnison said during Monday night’s city council meeting.
The cable tax, which primarily impacts Spectrum, formerly Time Warner Cable, generated $270,664 last fiscal year.
The telephone tax, which is assessed to more than 40 companies, brought in $228,097, down from $360,874 just five years earlier as people continue to disconnect their landline phones. The proposed hike would generate about $150,000 in additional annual revenue based on the figure from last fiscal year.
Kinnison called the potential boost a “generous number” while acknowledging that the telephone tax is a declining revenue source.
Councilman Prent Roth backed the increase, calling it a “fairness issue” between competing companies.
“Let’s even the playing field. Let’s get everybody at the same rate,” he said.
Others were less willing to support the proposal.
Mayor Jim Bulkley and Councilman John Lohr said they’d like to know whether the additional general fund money is needed before supporting a tax increase that’s ultimately paid by local residents. Bulkley added that he’d like to look for ways to cut spending before passing a tax hike.
Councilman Troy Heimer also opposed the increase, preferring instead to charge cable, internet and telephone companies a fee to install infrastructure rather than raising a tax that’s directly passed on to customers.
He was the only person to vote against a motion that brings the proposed tax increase back to the city council for future consideration. The council must approve an ordinance change before the occupation tax can be adjusted.