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KY Bill Hiking Fees On Prepaid Phone Service By 360 Percent Opposed By Groups Serving Low-Income Consumers

FRANKFORT, Ky., March 28, 2014 /PRNewswire-USNewswire/ -- Two consumer and low-income organizations – Consumer Action and the Community Action Partnership –are opposing a measure in the Kentucky House that would "sock poor Kentucky residents with an astronomically high 360 percent increase" in wireless service fees and also expose the same vulnerable consumers to double taxation.  

In a joint letter to Kentucky Governor Steve Beshear and Kentucky House Speaker Greg Stumbo, Consumer Action Executive Director Ken McEldowney and Community Action Partnership President and CEO Donald Mathis wrote:

"It has come to our attention that Kentucky House Bill 391, currently under consideration by the Kentucky legislature, would sock poor Kentucky residents relying on prepaid wireless with an astronomically high 360 percent increase (from $.70 on each $50 of wireless service to $1 on each $20 of service) for wireless service.

As advocacy groups that work on behalf of low-income consumers and the working poor, we urge you to defeat this bill. Or, at the very least, amend it to remove the increase on prepaid cards.

Consumer Action and the Community Action Partnership support the work of Kentucky police officers, firefighters, and other emergency responders and E-911. But a punitive tax on prepaid cell phones that would disproportionately harm Kentucky's senior citizens (particularly those on fixed incomes), veterans, the disabled, and low-income residents seems like the wrong solution to the challenge of paying for E-911. 

Any increase in fees should be comparable and fair, so that prepaid and postpaid consumers are taxed at equal rates.  Under the current bill, prepaid consumers would also have to pay sales tax on top of the E-911 fee.  Higher income consumers who can afford wireless contracts do not pay a tax on top of their E-911 fee, and neither should cash-strapped consumers who rely on prepaid. Here too, we urge the defeat of HB 391. Or, at the very least, amend it to remove the sales tax on prepaid phone 911 charges.

We believe that low-income consumers in Kentucky deserve fairness when it comes to how they are charged the E-911 tax. We urge you to reject HB 391."

Consumer Action is a national consumer advocacy and education organization that works through a network of more than 8,000 community based organizations. For more information, visit www.consumer-action.org.   

The Community Action Partnership is the nonprofit, national membership organization representing the interests of the 1,100 Community Action Agencies (CAAs) across the country that annually help 17 million low-income Americans achieve economic security.

SOURCE Consumer Action and the Community Action Partnership

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