Disputed I-172 off ballot [The Montana Standard, Butte :: ]
(Montana Standard (Butte) Via Acquire Media NewsEdge) June 20--HELENA -- If it qualified, Initiative 172 figured to be one of the most controversial measures on Montana' s general election ballot, but Charter Communications pulled the plug on it as part of a major tax settlement with the state announced Thursday.
The measure was intended to reverse a Montana Supreme Court ruling in December that went against the Bresnan Communications and upheld how the Montana Department of Revenue classified its properties for taxes. Charter now owns Bresnan.
Signatures for the initiative have to be submitted by state election officials Friday. As a result of the agreement reached late Wednesday night, Charter is dropping the initiative effort through a political group it largely funds, the Big Sky Broadband Coalition for Lower Taxation.
MEA-MFT President Eric Feaver, whose group unsuccessfully asked the Supreme Court not to allow I-172 to be circulated for signatures, was pleased the proposal is now off the table.
"The best thing is we're not going forward with a ballot issue of unprecedented proportions, when a single entity can go to the people and ask what its taxes are," Feaver said. "I think that's really dangerous. The potential was there for others to follow suit."
Charter spokesman Brian Anderson said Big Sky Broadband Coalition has agreed to suspend its effort to qualify Initiative 172 for the ballot because "the issues in the initiative have been resolved."
Chuck Denowh, spokesman for the Big Sky Broadband Coalition, declined comment on the deal that ended the I-172 efforts, deferring comment to Anderson. He also declined to whether it had sufficient signatures to qualify for the ballot. Last week, Denowh had said he believed the coalition would obtain the necessary signatures to qualify the measure for the ballot.
To qualify for the November ballot, the group needed to turn in by Friday the signatures of 24,175 registered Montana voters, including 5 percent of the voters in 34 of the 100 state House districts.
This spring, Charter filed a proposed ballot initiative to reverse the Supreme Court decision and reclassify its property as a cable company in Montana.
A Revenue Department audit in 2008 concluded that Bresnan's division of its properties -- used to provided television, Internet access and telephone services -- didn't properly reflect the company's actual uses of the property.
Instead, the department classified all of Bresnan's property as a "telecommunications services company" and said all of its property would be centrally assessed, not just the 10 percent that the company had reported as two-way communications.
The reclassification put all of Bresnan's property in a class that was taxed at a 6 percent rate. Bresnan previously had put its cable TV systems in a class with a tax rate of 3 percent and telecommunications in a class with a 6 percent rate.
Charter argued that under the Supreme Court ruling upholding the Revenue Department's classification of Bresnan's property, its annual property tax bill would go up by 329 percent, from $1.7 million a year to $7.3 million.
However, the fiscal note for the initiative prepared by Gov. Steve Bullock's budget office and the Revenue Department, saw the impact differently.
The fiscal note said if I-172 passed, it would have cost the state general fund $1.1 million a year and the Montana university system $720,000 a year. It would require the state to pay Charter $10 million retroactively from the general fund, while the university system would owe $645,000.
In addition, local governments would lose $55 million in Charter property taxes retroactively, and $6 million prospectively, which the fiscal note said would shift the tax burden from Charter to other residential, commercial and other taxpayers.
Under the larger tax settlement between the state and Charter announced Thursday, Revenue Director Mike Kadas said Charter property would continue to be centrally assessed, with the vast majority of its property taxed at a 6 percent rate.
In a couple of counties, Charter's property would be taxed at 3 percent because it has old one-way video property.
Charter bought the cable company in February 2013 from Cablevision Systems Corp., which in turn bought it from Bresnan in 2010.
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