Taxing by light bill | Arkansas Blog

Tuesday, October 13, 2009

Taxing by light bill

Posted By on Tue, Oct 13, 2009 at 6:26 AM

I see Conway is looking at utility rate increases to make up for tax shortfalls.

The morning paper carried news that North Little Rock Mayor Pat Hays said balancing city books will be the top priority when a new wholesale power contract reduces that city's wholesale cost of electric power. So a rate cut will come only after: 1) Hays takes off the top whatever he needs to run city government; 2) the city pays off a $15 million line of credit, with interest, that the city used like a credit card to pay for power, thus increasing the cost to residents over time,; 3) pays up-front costs on a new power source, a coal-fired plant in Osceola whose wholesale power cost hasn't yet been revealed.

Moral: When power is cheap, you can hide a nice city tax in electricity sales without a great deal of pain for residents. When it gets expensive, it's trickier.

Be glad you don't buy power from Pulaski County government. They'd be looking for even bigger employee pay raises first.

UPDATE: A North Little Rock blog, new to me, is roughing up the mayor on his plans for electric revenue. It's also pounding him for spending city money to buy one of those controversial flashing signs to advertise his Maritime Museum and the nearby private river boat. Wouldn't most private businesses like the city to shoulder some of their advertising costs, the blogger asks.

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