Thursday, October 30, 2008

What Do Franchise Fees Buy?

We can learn quite a bit from our neighboring cities on this topic. It appears that Chamblee, which also levies the Franchise Fee Tax, is considering a lawsuit against Georgia Power concerning the location of a substation. Why is this puzzling?

Well, the Georgia Municipal Association, an organization representing the interests of cities (though not necessarily their citizens) claims "franchise fees are not taxes, but are rent paid for the use of city public property by a utility". But if that were really the case, then Chamblee would buy, and own, the property for the proposed substation and would then lease it back to Georgia Power. The reality is that Georgia Power is buying the property they have (unilaterally, as is their right) chosen for the substation and furthermore were that property not for sale, they retain their powers of imminent domain and could force the sale.

Clearly, cities are not maintaining, expanding or controlling the property within their own city limits used by utilities. Once again, it is revealed that Franchise Fees are no more than appropriation of paid for assets and a new and never-ending tax by cities, including Dunwoody.