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Cable franchise fees bolster cities budgets
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Having cable service may do more than keep your family entertained. It may also help your local government provide quality services and balance its budget.

Under Georgia law, local governments can collect “franchise fees” from utility and cable providers. According to the Georgia Municipal Association, franchise fees are the rent paid by utility and cable providers for using public rights of way to do things like install power or cable lines. The goal of the fees is to “encourage economic development in cities” by providing “compensation for denser development and allowing utility companies to serve more customers in a smaller area.”

After a year when the other revenue sources — like local option sales tax collections — franchise fees help many local governments make ends meet.

For instance, in Jefferson, officials expect to collect $1 million in electric franchise fees that will be applied to the 2009 fiscal year.

Those fees helped the city increase the gap between revenue and expenditures and aided the city in not having a deficit for the fiscal year, says Amie Vaughan, city finance department director.

Over the past several years, franchise fees have consistently increased in Jefferson. In 2006, the city collected nearly $782,000. In 2007, about $855,000 were collected and, in 2008, the city collected a little more than $1 million.

“The jump between 2007 and 2008 was due to an audit done by the city of Jefferson staff. The list from the power companies was compared to the tax digest,” Vaughan said. “During this process, locations were found that were miscoded by the power companies as not being in the city of Jefferson. This was mainly due to growth and annexation changes during prior years.”

In addition to electric fees, Jefferson officials also collect gas and telephone franchise fees.

Jefferson isn’t the only local entity to benefit from the fees. Over the past three years, Hall County has collected more than $2.5 million in cable franchise fees. And according to county officials, additional franchise fees from BellSouth and AT&T were added in the 2010 fiscal year budget.

Gainesville also collects cable, electric and telephone franchise fees.

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