California Telephone Association Warns of Risks of Using Funds to Balance Budget.Business/News Editors and Government/High-Tech Writers SACRAMENTO, Calif.--(BUSINESS WIRE)--Aug. 13, 2002 The current budget impasse occurring with the California State Legislature The California State Legislature is the state legislature of the U.S. state of California. It is a bicameral body consisting of the lower house California State Assembly, with 80 members, and the upper house California State Senate, with 40 members. on the 2002 State Budget is impacting California's telecommunications companies See telecom company. . Several trust funds that were specifically created to provide transfer payments to telephone corporations providing services in high cost areas, and to carry out the programs required by the California Public Utilities Commission The California Public Utilities Commission (CPUC; also often commonly referred to as simply the PUC) [1] is a state Public Utilities Commission which regulates privately-owned utilities in the state of California, including electric power, (CPUC CPUC California Public Utilities Commission CPUC Current Procurement Unit Cost ), were recently identified by the legislature as sources of funds to balance the state budget. The trust funds at risk of being depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d of millions of dollars include the High-Cost Fund-A , High-Cost Fund-B, Universal Lifeline Telephone Service, Deaf and Disabled Telecommunications Program, Payphone payphone Noun a coin-operated telephone payphone pay n → Münztelefon nt; (card phone) → Kartentelefon nt Service Providers and the California Teleconnect Fund. "This action sets a bad precedent. CTA An abbreviation for cum testamento annexo, Latin for "with the will annexed." believes trust funds created from fees assessed for the express purpose of providing better phone services throughout the state should not be used to balance the State budget," said Margaret Felts, CTA President. In addition to depleting the trust fund balances, monthly cash flow from these trust funds ceased in July because distribution is tied to the authorization of the State Budget. Since the legislature failed to pass a budget, checks were not cut and will not be cut until there is a budget. For some of California's local service providers, the delay in trust funds distribution is creating a rapidly growing financial crisis. Sources at the CPUC say distribution of funds may be delayed until January, and then distribution will depend on budget actions taken by the legislature. This unexpected redirection of the trust funds is especially problematic for those companies that depend on them for up to 46% of their California revenue. Ironically, the financial instability created by the budget situation is exactly what was supposed to be prevented by the creation of the trust funds. To avoid the recurrence of this difficult situation in future years, some small, independent service providers in high cost areas may be forced to seek higher phone rates. Customers should contact their representatives with their concerns. |
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