Ohio Dems Propose Cable Tax

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Democratic lawmakers in Ohio want to expand the
state's 5 percent sales tax to cover cable television, a move designed to raise $64
million a year in new revenues.

Faced with a March 31 deadline for resolving the
state's school funding crisis, Senate Democrats have proposed legislation that would
expand the Ohio sales tax to cover wired cable, satellite technologies and management
services.

Senate Republicans, who control both houses of the
legislature, have countered with a plan that would ask voters to increase the state sales
tax by a penny. That would spare 2.6 million cable households a 5 percent increase in
their monthly bills, industry sources said.

Democrats claim that increasing the sales tax would be an
unfair burden on the poor.

Both sides are expected to unveil a possible compromise
later this week.

In the meantime, the Ohio Cable Telecommunications
Association has launched a campaign against the Democratic proposal, said Ed Koselek, OCTA
government affairs director.

Koselek said the industry is arguing that the reason cable
has been exempt from the sales tax is because the franchise fees it pays to local
municipalities are taxes 'unique to the industry.'

'It would amount to double taxation on cable
customers,' Koselek said. 'That's an argument that has merit with
lawmakers. We're telling them that'if you need to tax us, you need to offset
what we already pay, and you need to tax our competitors.''

Moreover, an increase in monthly cable bills will reduce
the amount of money paid to local governments as some consumers opt to drop their service,
he said.

The tax on satellite technologies was not included in the
original Democratic proposal. It was added later in order to 'appease' the cable
industry, Koselek said.

Officials for the Satellite Broadcasting &
Communications Association were unavailable for comment last week.

Meanwhile, OCTA is stressing that its members have wired 85
percent of Ohio's public and private schools for cable, and provide 540 hours a month
of free educational programming through the industry's Cable in The Classroom
initiative.

'We're doing our fair share,' Koselek said.

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