Cox Wants Az. Tax Pledge

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Cox Cable Phoenix has raised the eyebrows of a few politicos who have been informed they will not receive political donations from the company unless they sign a “tax equity pledge.”

The pledge is a new tactic for the operator. Cox and other operators in the state have tried unsuccessfully for three years to convince members of the state Corporations Commission and current legislators that the state tax scheme, which saddles terrestrial operators with franchise fees and other levies, creates an uneven playing field.

Direct-broadcast satellite services are not required to pay franchise fees. DBS companies argue that the policy is appropriate since they do not use public rights of way.

Letter to candidates went out on behalf of Cox from its Phoenix lobbyist, John Kaites, a former state legislator.

The letter notes that Cox PAC has $17,000 to use to back candidates, adding the company’s support will be based largely on a candidate’s response on the tax equity issue.

Unequal taxes have become an industry issue in a lot of states, said Ivan Johnson, Cox vice president of community relations in Phoenix.

“We’re not suggesting our taxes should go away, but the [tax] burden is not just tied to the use of right of way. We make cities whole and pay license fees” on top of that, Johnson said.

Legislators can decide to lighten cable’s load, or add taxes on DBS service, but Johnson stressed that Cox did not suggest a solution in its pledge letter.

“I have to hand it to them, they’re very upfront on exactly what they wanted,” said Barbara Lubin, president of the Clean Elections Institute, an organization that administers tax support for candidates who swear off money from special interest groups. “I don’t know if that’s good or bad,” she added.

“In my recollection, I don’t remember any organization being as blatant in support of a candidate on a specific issue,” Lubin said.

Johnson noted that he’s a member of the Greater Phoenix Chamber of Commerce, which also polls candidates on specific issues, albeit in personal meetings between the board and candidates.

Reaction to the letter, sent to 20 to 25 candidates, has been mixed, Johnson said. Support for tax equity is just one of four issues Cox will consider funding with PAC money, he said, adding that the company is backing some candidates who refused to sign the pledge. But Cox will definitely support all who sign and return the pledge. He did not disclose how many candidates fall into each category.