AUSTIN – The Texas Public Policy Foundation released a report today by Managing Editor Carine Martinez-Gouhier and Vice President of Research Bill Peacock highlighting the burden of franchise fees on the Texan consumer.
“Cities claim that franchise fees are a kind of ‘rent’ for the use of public right-of-ways,” said Vice President of Research Bill Peacock. “Instead, they function as taxes on consumers who pay about $500 million a year to cities on top of the cost of the electricity, natural gas, and telecommunications services they purchase. Members of the public are paying cities far more than required to use public property.”
Over the years municipalities have raised hundreds of millions of dollars in annual revenues from franchise fees. In the last six years, Texas’ ten most populous cities collected more than $3 billion in franchise fees. In 2013 alone, the total was about $511 million, with Houston levying an estimated $187 million, Dallas $103 million, and El Paso $42 million.
“Maintenance of the rights-of-way does have a cost, but only a portion of the fees collected goes to their maintenance,” said Managing Editor, Carine Martinez-Gouhier. “For example, out of the $103 million collected in Dallas in 2013, only about $10 million was budgeted for maintenance; the rest went to support general spending. The Texas Legislature should stop cities from levying these exorbitant taxes on their own citizens and allow them to collect only enough to pay for maintenance.”
Bill Peacock is the vice president of research & planning and the director of the Center for Economic Freedom at the Texas Public Policy Foundation.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin.
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