Tuesday, December 07, 2010

Markley Finds DPUC Taxing

The election of Joe Markley to the Connecticut’s General Assembly as a senator is, in the estimation of some Republican activists, on a par with dropping holy water into Hell.

Mr. Markley has shed a few pounds since he first entered the Assembly a little more than a quarter of a century earlier during the Reagan ascendancy. He now looks like a svelte and convivial Mitch Miller, the hair on his head having over the years migrated to his chin.

But looks, as they say, are deceptive. Mr. Markley can quote Shakespeare in polite company; he is more analytical than the usual latte lapping liberal, an adept stump speaker and dead serious about the pernicious effects increasing taxes have on a foundering economy. There is some indication that he’s familiar with Ludwig von Mises’ views on methodological individualism. Mr. Markley is a serious conservative, not at all a lightweight easily dismissed as a Tea Party insurrectionist motivated largely by undifferentiated anger, the usual critical spittle liberals throw at thoughtful oppositionists -- which is not to say that Mr. Markley cannot on occasion be sharp, a estimable virtue that may stand him in good stead in Connecticut’s abysmally arrogant and tin-eared legislature.

These days, perhaps in order to avoid offending perpetually huffy liberals, Mr. Markley describes himself as “a very relaxed firebrand.”

Most recently, Mr. Markley has challenged in court an insufferable presumption of the Department of Public Utility Control, which apparently considers itself a proper tax collecting agency.

When Connecticut transitioned to competitive electric markets some years ago, the state imposed an assessment on electric companies to assure a smooth transition. The assessment, due to expire in 2010 for Connecticut Light & Power customers and in 2013 for customers of United Illuminating, has now been extended indefinitely by a public act that transforms the fee into the kind of tax gimmick that Governor-elect Dan Malloy frowned upon during his election campaign.

Money from the continuing Competitive Transition Assessment (CTA) will be used, under Public Act 10-179, to fund Economic Recovery Revenue Bonds (ERRBs) sold to fund the state’s burgeoning deficit. Before Mr. Markey filed his suit, the state had anticipated selling about $1.3 billion in ERRBs to finance its growing debt, but in mid-November state Treasurer Denise Nappier wrote in a letter to Gov. Jodi Rell, much criticized by leading Democrats for having relied overmuch on gimmicks to balance state budgets, that “There is a potential legal issue that may well affect the timing of the sale, of which you may or may not be aware. Senator-elect Markley has filed a law suit alleging that the underlying statute authorizing the sale of ERRBs supported by utility revenue is an unconstitutional taking. Until this litigation is resolved, our ability to go into the market is questionable.”

In his suit, Mr. Markley argues that the continuing assessment under the new financing order is “will be a direct tax on all electric ratepayers in the State of Connecticut, unrelated to public service companies and utilities.”

According to Markley, nowhere “is the DPUC given the authority to tax residents, businesses or other entities of the State of Connecticut, unrelated to the public service companies. Under the new financing order, the CTA revenues will be a direct tax on all electric ratepayers in the State of Connecticut, unrelated to public service companies and utilities.” Not only is the new order an unconstitutional tax, but the tax itself is unfairly collected because it would not impact electric consumers serviced by municipal electric companies that never had to pay the original CTA.

Mr. Markley’s suit very likely will not be bouncing around in Connecticut’s judicial jungle for too long. In a state used to utilizing gimmicks to plug holes in its budget, any interruption of the money flow quickly engages the interests of tax consumers both inside and outside the legislature. Attorney General Richard Blumenthal is required by statute to represent the DPUC on this one. One would like to imagine that Mr. Blumenthal is secretly disappointed because his compassionate heart, usually beating in unison with oppressed and duped consumers, is not on this occasion fully engaged in Mr. Markley’s struggle to bring state agencies in line with constitutional strictures.

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