Oregon lawmakers capitalized on this week’s special legislative session for a quick vote on new cell phone taxes.
The bill passed the House and Senate on largely party-line votes Friday, with the Democratic supermajorities hurrying the measure through amid a flurry of activity as this week’s brief session wrapped up.
The bill, which now awaits the signature of Gov. Kate Brown, will shift the cost burden for funding rural telecommunications services from the dwindling number of landline phones to include the much larger number of cell phone subscribers.
Backers say it will raise the cost of typical cell phone bills by about $4 a year and raise $5 million for rural broadband. Supporters estimate it will save typical residential landline customers around $11 a year.
A similar bill died during last year’s legislative session when Republicans walked out to block a Democratic bill on climate change.
This year’s bill had a tenuous connection to the coronavirus pandemic, one of the reasons for the unusual special session. But the bill’s major backer, Rep. Pam Marsh, D-Ashland, insisted that the epidemic had highlighted the importance of fast internet service in rural communities.
“The coronavirus crisis has demonstrated beyond doubt that broadband is vital for our physical, social, economic and physical health,” Marsh said.
Internet customers in the Portland area usually have at least a couple choices for high-speed connections, but many lightly populated pockets of the state have stubbornly slow service. That’s because stringing high-capacity fiber-optic cables is expensive and telecommunications companies are loath to spend the money unless there is a high concentration of potential customers nearby.
Already, Oregon is planning to use newly granted federal funds to finance broadband expansion. Republican opponents of the Senate Bill 1603 argued Friday that the state should rely on that money to improve internet service rather than hike taxes in the middle of an economic crisis.
“I think this is absolutely the wrong time to be taxing cell phones and raising taxes on Oregonians,” said Rep. Cheri Helt, R-Bend.
Other Republicans said the bill represents a new tax, which would require three-fifths approval in both houses under Oregon’s constitution and other procedural steps to become law. Democrats said the bill doesn’t constitute a new tax, because it removes a previously established exemption for wireless carriers.
Oregon has long had some of the lowest cell phone taxes in the nation. The Tax Foundation says they are now the very lowest, one-sixth of the national average.
Correction: Supporters estimate the fee will cost cell phone subscribers $4 a year, as previously reported, not $4 a month.
-- Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699
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