Local 911 officials rally for tax on prepaid phone cards

Parish officials say an estimated $200,000 a year lost locally

By Matthew Penix
St. Tammany News
Published on Monday, March 17, 2008 12:04 PM CDT



Losing an estimated $200,000 a year, the St. Tammany Parish Communications District is rallying for legislative action to collect taxes on prepaid phone cards that fund local 911 communication systems.

Across the state 911 communication systems currently operate on taxes collected every month from cell phone and phone lines, fees between 85 cents and $1, respectively, per month.

But the tax has never been declared on prepaid phone cards, causing 911 communication systems across the state to lose potential revenue. In St. Tammany, officials estimate the loss between $200,000 and $250,000 a year, critical money needed to improve emergency communication systems, said H.W. "Woody" Glover Jr, director of St. Tammany Parish Communications District, otherwise known as the 911 communication district.

"We'll have to taper off a lot of projects," Glover said, referring to, among other cuts, a parishwide communication system upgrade for fire dispatchers. "We're going to have to cut back programs."

Glover, along with chairman Tom Buell and other board members, said they are working with Sen. Edwin Murray of New Orleans to write a bill requiring prepaid carriers to pay the tax.

Murray was in special session this week and did not return a phone call seeking comment. A check of recently filed bills by Murray produced no such similar bill filed in advance of the regular legislative session this spring. Both Glover and Buell were also unaware if any such bill had been written.

If and when a bill is filed, Buell expects a backlash from prepaid cellular companies, whose deep pockets may bring legal fights to court or unleash well-healed lobbyists arguing against any such tax. The opposition's argument, Buell said, is it's impossible to track where the cards are used, a fact crucial to determine which 911 communications center should collect the tax.

But Buell argued on Wednesday it shouldn't matter where the cards are used. Include the tax at point of purchase, he said.

"Our argument is collect it where you buy it," Buell said. "Use zip codes when buying to decide where to send those funds."

It's estimated the average prepaid cell phone customer buys $50 worth of call time a month, Glover said.

The St. Tammany Parish Communications District wants to collect 1.7 percent of that fee in taxes.

"You're going to get more people buying prepaid phones, so we're going to be losing money," Glover said. "We need to do something."


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