Consequences and “Fees”

You’ve heard it before – elections have consequences and it turns out that the election of 2012 will cost unincorporated Bernalillo County taxpayers an additional 3% for utilities.

In October of 2012 the Bernalillo County Commission passed the Rate Payer Protection Act – a resolution that prohibited the county from taxing basic needs utilities for the use of county right of ways. The resolution also required the county to recover reasonable actual fees associated with accessing the publicly owned space and for those fees to be approved annually by the County Commission.

Fast forward to May of 2013 and a new Commission with an old “tax it if it moves” philosophy. The first step was to repeal the Rate Payer Protection Act and publish an ordinance that – if passed – would impose a 3% tax on all utilities that use county right of ways.

That’s 3% more on every water bill, electric bill, gas bill, waste water bill, and phone bill at a time when families are struggling just to survive.

The bill’s sponsor, Commissioner O’Malley, and County Public Works will tell you that they need the additional $6 million a year for roads. They’ll tell you that it’s a fee, not a tax, and not to worry, the utilities will pay.

While it’s true the county should be putting more money into roads, a tax is a tax even when you call it a “fee”, and utilities can, do, and will pass the proposed 3% “fee” on to you no matter what it’s called.

You see, the price charged for any good or service is equal to the cost plus a profit. Contrary to the opinions of some, a company must make a profit or it ceases to exist. Regulated utilities must justify their rates to the PRC – rates that include a profit. Costs are any kind of expenditure whether they are labor, construction, capital, regulatory, legal, taxes, and yes… “fees.”

To say that the county will be taxing “utilities” not the public is rhetorical, delusional, and false. In fact, state law requires that franchise fees “shall be stated as a separate line entry on a bill sent by a public utility.”

YOU will pay and you’ll pay on those basic services that you need most, all to use land that you already own, for a commodity that you can’t do without.

Yes roads are important, but all of the expenses associated with accessing your right of ways are already paid for by the utilities which include road cuts and repair to county standards. They even pay for “de-confliction” in those cases where other existing utilities must be moved in order to accommodate new pipes, wires, fiber, etc. And yes… you pay for all of those costs as well.

Not to mention the fact that you are already paying for road maintenance and construction through your property “fees” – more commonly known as property taxes.

There’s also the very real legal question of whether or not a county has the authority to impose a “franchise fee” that exceeds the county’s actual expenses.

NMSA 1978 § 62-1-3 states that a board of commissioners is authorized to impose charges for “reasonable actual expenses incurred in the granting of any franchise.” Unfortunately, the county is unable to provide anyone – including the county’s internal auditor – with the actual expense of granting a franchise.

So instead, they’re trying to sell you on the idea that the need for road maintenance and repair is a “reasonable actual” cost.

But it’s hard to believe that $30 million dollars over the next five years is either “reasonable” or “actual” – particularly when the county’s bond dedication for roads over the same period is less than $20 million. In reality, this is just another scheme to separate you from your money and hide the fact that the county is doing a poor job of funding one of its core functions.

If the franchise fee weren’t enough, County Public Works is doubling down on construction costs as well by tripling the design review fee and adding an “application fee.” And you guessed it… You’ll get to pay for these increased fees as well.

In short, you will be paying for roads that you already pay for, on land that you already own, for services that you can’t live without, all because the current Commission cannot or will not use the money you already provide for its intended purpose. And the whole scheme is probably illegal to begin with.


The above column was published in the Albuquerque Journal June 21st, 2013 under the title “Call it a ‘fee,’ call it a ‘tax,’ but whatever you call it, it’s unfair.” (Subscription)