Fairfax County officials lashed out at Verizon Communications Inc. for providing "misleading" information to its customers in a campaign it says would lower their phone taxes.
Starting this week, Virginia's largest telephone service provider is sending its 1 million customers an insert in their bills that shows a cartoon of a masked man named the Phone Tax Man wrapped in a phone bill with a dollar sign under the word "tax." "Ever wondered . . . Is it a phone bill with tax added on or a tax bill with phone added on?" the flier says, then describes legislation that will go before the General Assembly that is likely to "significantly reduce your phone taxes."
But Board of Supervisors Chairman Gerald E. Connolly (D) called Verizon's campaign a "highly misleading, one-sided rant" that might not lower taxes for Fairfax customers at all.
Local governments levy phone taxes at different rates across the state, revenue Verizon collects for them, mostly to fund emergency 911 service. The telephone and cable industries are pushing legislation to change the complex system of taxes and fees by imposing an across-the-board 5 percent tax on phone and cable services, in addition to some Internet and satellite television services that are not currently taxed. The industry says that collecting so many different taxes is an administrative burden.
But Connolly said his county, which collects about $60 million a year in phone taxes, could end up with less for 911 service under a system in which the state would collect the tax and divvy it up among local governments.
Fairfax officials have long complained that the county gets back a fraction of the tax money it pays the state.
"This could be a scheme to use Fairfax dollars to subsidize the rest of the state," Connolly said at yesterday's supervisors meeting. "We'd be the biggest tax donor and the biggest loser." Fairfax could have to collect any lost revenue through higher property taxes, Connolly said.
The public rebuke came the same day the board authorized a public hearing for September on Verizon's plan to provide cable television service in the county, competing with Cox Communications and Comcast. Supervisors praised the preliminary agreement as welcome competition and are expected to sign off on the plan.
But yesterday, Connolly said Verizon's marketing campaign had thrown an "irritant" into the utility's relationship with the state's largest local government. "Ironically, they're asking us to enter a new relationship while they're attacking local government," Connolly said.
Verizon officials said Connolly doesn't have all the facts. A new telecom tax system would generate the same $391 million a year as the current one, and Fairfax would receive the same amount it now collects in local phone taxes, said Robert Woltz, president of Verizon's Virginia operation.
"I'm disappointed the chairman hasn't gotten the information to address his concerns," Woltz said. He said that under the proposed taxing system, Fairfax would receive more 911 funding. As the number of phone landlines falls in favor of non-taxed Internet calling, revenue has declined. "The local tax base is shrinking," Woltz said.
The county appears to be caught in a battle between phone companies and cable and satellite television companies, which do not tax their customers. When a similar tax bill was introduced in the General Assembly this year, the satellite industry complained that its customers would be taxed, and the measure died. Woltz said Verizon's flier is an attempt "to make sure our voting members of the General Assembly hear from the public as well."
In other action, the supervisors authorized another public hearing for September to allocate a year-end surplus of about $46 million. Board members and County Executive Anthony H. Griffin have suggested a range of uses for the money, including savings, school spending, tax relief for retirees, upkeep of athletic fields and an annual report on the county's accomplishments.