Electric utility franchise fee.

There is a tax embedded in your electric bill. 

It will likely be going up.

On Monday the Budget Committee of the City of Medford recommended the City Council increase its electric utility franchise fee by 2%. 

The cost of that franchise fee is passed on to customers. The least controversial tax to pass is an invisible one collected by a third party in a meeting neither the general public nor the media attend. I thought someone should report on it.

A citizen Revenue Committee had looked at 29 potential places to raise new revenue to deal with an impending city budget deficit. The deficit was caused by rising personnel costs combined with the end of one-time federal Covid money. They considered and discarded some ideas.

The Revenue Committee recommended an increase in the electricity franchise fee. Wherever one lives in America one is likely paying a tax embedded in one's electric, gas, and cable TV bill. Utilities deliver service using wires or pipelines located on public rights-of-way -- the streets. That gives the city or county an opportunity to extract a fee for that use. The Medford Budget Committee just voted to recommend that electricity franchise fee be raised from 7% to 9%, which would raise approximately an additional $1.5 million a year, spread out across the utility bills of the approximately 85,000 Medford residents. It is small potatoes, but it adds up. 

I was appointed to the Medford Budget Committee and would normally have been in the room helping to vote "yes." That blank spot at the table on the left side of the photo was my empty seat for that meeting. 

I was on a return flight from New Hampshire. The Budget Committee meetings are recorded. Go to about minute 50 for this discussion. There are opportunities for pubic input at these meetings, and the public is given notice. I have seen no members of the "general public" at the meetings--just city staff and Budget Committee members. This is not surprising to me. The simple reality is that the meetings are long and tedious, and most of the matters that might arouse a citizenry to cheer or complain have been worked out prior to the meetings. 

Some city taxes are very visible, and that makes them subject to controversy. Most of the city's general fund comes from property taxes, a levy on the value of real property. The owner of a $600,000 home pays twice the tax of the owner of a $300,000 home. Everyone can see on a tax bill what one owes the city, the county, the schools, and other government entities. The franchise fee tax is not visible. We see an electric bill, not an electricity-and-city-tax bill. 

There was brief discussion about whether this added fee would create an "undue burden" on electricity users, especially people threatened with homelessness. A member of the Budget Committee had served on the Revenue Committee also. He said that the Revenue Committee had been very cognizant of the potential impact, but that they concluded this was still the best way to proceed. 

I consider this a reasonable and equitable tax. Wealthier people with bigger homes will probably use proportionally more electricity than people with smaller homes. People plugging in electric cars are using roads but not paying gasoline taxes to support roads. Taxing electricity a bit more seems fair to me.

These meetings don't have the conflict or fireworks that make a good story in the media, but it is important work. This is self-government. Self government works more smoothly when nobody is paying attention. But it works better when people know what's going on. The Budget Committee just recommended a tax increase. Local readers probably would never have noticed, but I thought people should know.

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