Senators Say Companies Shouldn’t Pay If Funds Are Siphoned to Balance Budget
TRENTON – A Senate committee today released legislation Senator Shirley K. Turner and Majority Leader Loretta Weinberg sponsored to repeal the tax cable companies have been paying into a fund to support a program that was set up to provide financial assistance to senior citizens and customers with disabilities, but has instead been siphoned away to balance the budget.
Created in 2006 as part of the broad cable television reform law that opened up the state’s market to greater competition among providers, the CATV Universal Access Fund has collected a one-half of 1 percent tax from cable company revenues and was designed to benefit residents enrolled in the Pharmaceutical Assistance to the Aged and Disabled program.
Since its creation, cable companies have paid $14.2 million into the fund – but since rules for disbursing assistance have never been written, none has ever been given. In each of the past two fiscal years the governor has diverted the fund’s balance to the state’s general revenues to help shore up the budget.
“This fund was created to help low-income older residents pay their cable bills, not to be a piggy bank for the administration,” said Turner (D-Mercer/Hunterdon). “It’s unfair to continue to expect anyone, even cable companies, to pay a tax if the revenues are not being used for their intended purpose. And if cable providers can use this tax cut to reduce bills even a little for all customers, it would be well worth it.”
During the current fiscal year, the tax has generated approximately $5 million. The governor’s proposed FY2013 budget anticipates an additional $5 million in revenues from the tax, which again would be diverted to the General Fund.
“If this money isn’t going to the low-income, elderly residents it was supposed to help then we need to stop collecting the tax,” said Weinberg (D-Bergen). “It’s disingenuous and bad policy to keep a tax on the books when there’s no intention whatsoever to use it in the way it was conceived. If the administration isn’t going to follow the law, then they should give back the money – or better yet, not even be allowed to collect it in the first place.”
The bill (S-1500) was released by the Senate Economic Growth Committee and now heads to the Budget & Appropriations Committee for further consideration.