Last session, the Texas Legislature eliminated the obsolete Telecommunications Infrastructure Fund (TIF) tax that had been taking about $210 million a year from the pocketbooks of telephone customers. Originally enacted to fund Internet infrastructure in public schools and libraries, the TIF tax had been going to general revenue for several years.

Now the Texas Public Utilities Commission is poised to reduce phone bills even further by addressing another out-of-date fee.

The Austin American-Statesman reports that an agreement between telephone companies and cable companies to reduce payments from the Universal Service Fund (USF) will lower phone bills by $144 million a year if the Public Utility Commission adopts the agreement.

While the USF helps to keep phone service in rural Texas at reasonable levels, deregulation of the market and the increasing urbanization of our state have decreased the need for subsidies.

Over the past three years, the Foundation’s research has shown that Texans’ telephone taxes are among the highest in the nation. With this reduction, along with the repeal of the TIF tax, Texas consumers will see their tax bill reduced by about $350 million per year. We still have much room for improvement, but this is a great second step.

– Bill Peacock