If it walks like a duck …

Published 9:10 am Friday, July 29, 2011

The Franklin City Council has taken great pride in holding down the city’s real estate tax rate in recent years, even lowering it significantly a few years ago to offset the impact of higher assessed values.

We appreciate the council’s fiscal restraint during what has been a difficult time for the citizens who fund city government’s coffers. Higher taxes would have been impossible for many to stomach thanks to a depressed national economy and the loss of the community’s anchor employer and its thousand-plus jobs.

However, if the council plows ahead with a proposed 7 percent increase in electricity rates this fall, council members’ boasts about a stable property tax rate will be less credible. Make no mistake: Under Franklin’s system of using electricity revenue to subsidize the city’s general fund, a 7 percent increase in electrical rates is the equivalent of a tax increase. City officials can call it what they want, but it’s the same as a tax hike.

If it were entirely about covering the operating expenses of Franklin Power & Light, the city-owned electrical utility, the City Council could simply halt its long practice of transferring millions annually from FP&L to the general fund. No electricity rate increase would be needed. In fact, rates could be lowered.

We have no problem with the logic of letting FP&L subsidize the general fund. It spreads more equally among renters and property owners the fiscal burden of providing city services. Homeowners and business owners would otherwise pay disproportionately.

We just hope the City Council doesn’t attempt to characterize the pending electricity rate increase as something other than what it is: a bigger tax tab for the citizens of Franklin.