Citizen Groups Ask to Be Heard at Texas 911 Hearing.

Cancellation of Vote Sought at July 25(th) Meeting; Tax on Low-Income Texans Seen As Doubly Unfair Given CSEC's Apparent $100 Million FY 2007 Surplus

AUSTIN, Texas -- Two statewide consumer groups today called on the Commission on State Emergency Communications (CSEC) to cancel a new prepaid cell phone tax hitting several hundred thousand of the state's most vulnerable consumers. One group, Texas Consumer Association, has been spearheading the opposition to the unfair tax increase. TCA was joined by Public Citizen of Texas, which signaled today for the first time that it also opposes the controversial CSEC action.

The CSEC's board met in Austin June 20 and adopted a new $.50 monthly tax to be charged when consumers purchase a prepaid cellular phone. Prepaid cellular phones are phones that do not involve a billing arrangement with the customer, unlike "postpaid" cellular phones sold on a more expensive long-term agreement basis. The inexpensive phones are relied upon by low-income consumers - including the elderly and immigrants - for who the new tax would be burdensome.

The two consumer groups have sent a letter to the CSEC, requesting time on the upcoming meeting's agenda to discuss the critical need to change the ruling made at their last meeting. In addition to opposition from the two consumer groups and the Gray Panthers, three members of the Texas Legislature have sent letters to the CSEC, asking the agency to cease collecting the fee on prepaid cell phones until the legislature has the opportunity to review the situation. The lawmakers include State Representatives Elliott Naishtat, Rafael Anchia, and Eddie Rodriguez.

In addition, the groups have asked why this action was taken when the CSEC appeared to be running a surplus of $100 million at the end of FY 2007, according to the Texas Annual Cash Report.

"Why was this action taken to harm hundreds of thousands of the state's most vulnerable consumers when the agency didn't even need the money, and is sitting on more than it knows what to do with?" asked Tom "Smitty" Smith, director of Public Citizen, Texas Office. "This is not an agency that is strapped for cash to complete its mission. Instead, there is the appearance here that the state's most vulnerable consumers are being tapped by an agency that is flush with cash."

"In fact, too many Texans already are priced out of having cell phones Owhich could serve as an important link to their ability to get and keep jobs, access medical care and stay in touch with family," said Sandra Haverlah, president of Texas Consumer Association.

"Clearly, it makes no sense to finance a phone-based public safety system by literally pricing phone service beyond the means of those who are expected to pay the tax," noted Haverlah. "We are very concerned that the agency took this action in the face of what appears to be a sizable reserve in the fund, which means that our state's most vulnerable consumers are being zapped for no good reason whatsoever."

"We are urging the CSEC to cancel this anti-consumer action when it meets again on July 25, 2008. As noted by legal counsel during the CSEC board meeting June 20th, there is no authorization in Texas law for this tax," stated Haverlah of the Texas Consumer Association. "Because the relevant statute was passed by the Texas Legislature before the advent of prepaid cellular phones, there is no provision in the law which allows the 911 fee to be paid by customers of prepaid phones."