Archive for Wednesday, April 4, 2001

April 4, 2001

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Justin Hill says it's time for a modern-day Boston Tea Party.

In the spirit of overtaxed patriots heaving tea into Boston Harbor, Hill is arguing that a scheme being considered to refund tax overpayments forgets some of those who originally paid the taxes.

"I just don't think this is very American to tell someone that you paid your money but you don't qualify to get it back," said Hill, an executive of Lawrence Paper Co. "The whole thing strikes me as organized theft, and we need to organize a Boston Tea Party."

As Kansas Corporation Commission hearings into how to distribute about $27 million in natural gas refunds continue today, Hill is trying to get people to understand what's happening.

At stake for the average homeowner is a refund that could amount to as much as $60. For companies like Hill's, tens of thousands of dollars are at stake.

The question before the state commission is who should get the money, which is due under a recent settlement of a lawsuit that dates to the 1980s involving producer taxes that were unfairly passed on to natural gas consumers.

Usually, such refunds go back to all customers who overpaid. Under a refund distribution agreement approved in December by the KCC, residential, small commercial and industrial customers all would have shared in the refund.

But in January the Legislature -- responding to record-high gas prices -- passed resolutions directing the KCC to give the money only to residential consumers within 300 percent of the poverty level. That would mean a family of four with an annual income of less than $51,150 would qualify.

The Citizens' Utility Ratepayer Board supports using the money for such a one-time utility assistance program. Social service groups say the aid is sorely needed to bail out people who usually pay their bills but are struggling under the winter's high prices.

But that doesn't sit well with Hill and other industrial users.

"I'm just appalled at what the Legislature has done, that they've asked the KCC to do this," Hill said.

And what's the state's ratemaking body doing putting together what boils down to a social program, anyway?

"That's certainly a fair question," said Rosemary Foreman, KCC spokeswoman. "The answer to that is this all happened at a very unique time, this winter, when gas prices hit all-time record high levels."

And though the House and Senate resolutions aren't binding, they "certainly state the intent of the Legislature."

Some of the money from the settlement already is being returned to low-income ratepayers through a one-time aid program. Another chunk already was returned to customers through a one-time credit.

What happens with the remaining $26.6 million will be decided by the commission after conducting more hearings. Hill already has testified, as have representatives of Kansas University, Farmland Industries Inc., and several other companies. Today's hearings were expected to begin with testimony from CURB.

Foreman couldn't say how long it would take to settle on a plan.

The commission is accepting written comments on the issue. Write to the Kansas Corporation Commission, 1500 S.W. Arrowhead Road, Topeka, 66604. Refer to the "ad valorem tax issue."

-- Managing editor Richard Brack can be reached at 832-7194.

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