Voices For States Crying In D.C. Wilderness

Posted on October 27, 2003

WASHINGTON — Here's shocking news: A couple of lawmakers here actually mean it when they talk about opposing federal mandates on the states. Sens. Lamar Alexander (R-Tenn.) and George Voinovich (R-Ohio), two former governors, are trying to slow passage of a bill that would extend the federal ban on state and local governments levying service taxes on the monthly fee people pay for Internet access. The ban, which has lasted seven years, expires Saturday. Tennessee is one of a handful of states whose taxes on access charges were permitted to continue under previous bans, but they would be wiped out under the new bill. Worse yet, the language of the bill could be read to eliminate taxes on telephone and cable television services if they are bundled with Internet access. Gov. Phil Bredesen told the state's congressional delegation he could live without the $18 million a year the state collects in sales taxes on Internet access, but not the $360 million a year in other taxes the measure puts in jeopardy. Senate Majority Leader Bill Frist (R-Tenn.), who favors the bill, told Tennessee reporters that an amendment next week would narrow the language to include just Internet access charges. But unless Alexander and Voinovich lift their "hold" on the bill, Frist might need 60 backers to force a vote on the measure. Grover Norquist, president of Americans for Tax Reform, charged that Alexander and Voinovich "are more concerned about protecting tax collectors instead of taxpayers." But in a speech on the issue, Alexander explained that he was defending the right of lawmakers in Tennessee and elsewhere to decide for themselves what should be taxed or not taxed. Alexander said he supported a moratorium on new access charges "so the Internet could get up and going, but now it is up and going." "Is access to the Internet more important than food?" Alexander asked. "If not, then why not limit the state sales tax on food, medicine, electricity, natural gas, water, corporations generally, car tags, telephones, cable TV? They are all in interstate commerce. "This is none of the Congress's business. It is a state and local responsibility to decide how to pay the bill to fund state parks, local schools, roads, prisons, colleges and universities." Alexander and Voinovich will probably lose their battle this week, but their stand on principle should be remembered. Republicans especially "are big talkers about local control, about state responsibilities, about state rights," Alexander said. "Somehow when we get to Washington and away from home a lot of that goes up in smoke."