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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Tuesday, April 10, 2007

I've got a bridge for you...

As we gear up for Boston's unofficial top holiday, Opening Day, everything and everyone not named Matsuzaka seems to be fading from the headlines. So it seems like a good time for one of the state's underdogs, Verizon, to plead for tax fairness.

You know that small business -- the one that provides you with telephone, wireless, broadband and maybe television service. The company, as it progressed from New England Telephone the NYNEX, Bell Atlantic and finally Verizon, got more arrogant and started charging even more for directory assistance.

The company whose CEO, Ivan Seidenberg, made $109 million over the last five years while its shareholders saw a 0.5 percent drop in return on investment. The company that proclaims 2006 a "strong year of organic growth" with $88.1 billion in operating revenue, up 26.8 percent.

Well, they and their downtrodden business associates need a tax break, at least according to Donna C. Cupelo, the regional president of Verizon in Massachusetts and Rhode Island
Just last year, Verizon invested $600 million in Massachusetts to continue efforts to transform its network to a technologically advanced all-fiber network. At the same time, it generated $180 million in state and local taxes. Counting payroll for its 14,000 employees, pensions, healthcare costs, and almost $500 million spent with Massachusetts vendors, in 2006 Verizon alone poured over $2 billion into the state's economy.

Together, the major carriers generated almost $500 million in state and local taxes last year, including $221 million in sales taxes that are not assessed on other companies.

To hear Verizon tell it, they need to cash to invest in new lines and equipment to keep us in our high-tech communications mode. Feed our addiction, as it were. Part of the way they receive that cash is by being exempt from property tax on the poles, lines and other equipment located in your city and town.

You know, that community looking to cut police, fire or teachers to avoid raising YOUR property tax?
So while it's true that some (but not all) of Verizon's property is exempt from property taxes, that policy generates an extremely good return for the Commonwealth. That is not a loophole but a deliberate state policy that encourages companies like Verizon to stay and build, create more jobs, and grow the economy.
Of course without adequate resources to provide the basic services we need, Massachusetts cities and towns aren't going to be able to keep the residents we need to buy those Verizon services. You know residents, like Verizon employees.

Oversimplified? Of course. Same as the Verizon argument. But taxpayers should consider sending a message that asks the phone company "can you hear us now" when it comes to being a good neighbor and sharing the burden imposed on their neighbors

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1 Comments:

Anonymous lisa said...

In addition to your excellent thoughts, there's the added wrinkle that telecom is exempt from paying property taxes on poles and wires when others, like Comcast, aren't.

This is also an issue of basic fairness - there should be a level playing field for all industries.

These loopholes were created in the early part of the 20th century in order to spur investment in a then-nascent industry. But given that telcom has become so successful that the extra revenue that would be collected by the City of Boston from closing these outdated loopholes wouldn't even make up Verizon's CEO's salary, pleading poverty on the backs of Massachusetts homeowners seems disingenuous, to say the least.

April 12, 2007 11:32 AM  

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