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Legislators deny ad tax is retaliation for bad press
Saturday, January 21, 2006

HARRISBURG -- It's no surprise that state legislators are angry with news organizations for the torrent of stories criticizing the 16 to 34 percent legislative pay raise that was enacted in secret last July and then repealed in November.

But is new legislation that would extend the state sales tax to advertising -- a move that could hurt many newspapers, radio and TV stations by reducing their ad revenue -- the first shot at a payback?

State Rep. Tim Solobay, D-Canonsburg, left a voice mail message with the owner of a Washington County newspaper that indicates that some sort of retaliation might be in the works.

"For the most part, the majority of the legislative feeling about the media right now is, if there's something they can do to screw them, you can imagine it may occur,'' Mr. Solobay said in the recorded message to Cody Knotts, owner of The Weekly Recorder in Claysville.

"The legislative agenda, maybe not come this spring, but I bet you can guarantee right after November, there'll be an all-out assault on the written media,'' Solobay said. "Let me tell you, I'm just kind of telling you what I'm hearing.''

Mr. Knotts said yesterday he had called Mr. Solobay to express opposition to the advertising tax, which Mr. Knotts claims will reduce his ads and drive firms such as direct mail companies out of the state.

The bill to tax advertising has been approved by the House and awaits Senate action. It would extend the state's 6 percent sales tax (7 percent in Allegheny and Philadelphia counties) to all forms of advertising, including print, broadcast, billboards and direct mail. Higher ad costs could force companies to cut back on their ad spending and cost news organizations revenue.

The ad tax bill is part of a broader effort to raise additional money from the sales tax as a way to reduce property taxes. Two newspaper publishers and a TV station owner complained about the ad tax at a Senate hearing this week.

Mr. Knotts said he takes the warning from the legislator very seriously.

"Their plan is beautiful. It's smart politics. They can get the pay raise off their backs by lowering people's property taxes. Property tax reform will come on the backs of the media.

"This is an attempt to shut down freedom of speech'' and make news organizations reluctant to upset lawmakers, Mr. Knotts said. "But it does more than that, it hurts the state's economy.''

Mr. Solobay could not be reached yesterday.

Deborah Musselman, a lobbyist for the Pennsylvania Newspaper Association, said she's concerned about two House-approved bills that now await Senate action.

The advertising tax bill is one. The other would require the state Department of State to make postings of corporate formations and dissolutions on the Internet, rather than buying legal notices in newspapers for such public announcements

"Both of these bills would harm newspaper revenue,'' Ms. Musselman said.

Tom Andrews, an aide to House Democratic leader H. William DeWeese, of Waynesburg, pooh-poohed the idea that legislators want to retaliate against the news media.

He said lawmakers are looking at all possible ways to raise $2 billion or more to use in reducing property taxes, and extending the sales tax to services not now covered, including advertising, was simply one approach. Several senators said this week they don't see the advertising tax being approved.

Stephen Miskin, an aide to House Republican leader Sam Smith, of Punxsutawney, said that if Mr. Solobay was serious when talking about retaliation, his comments are "ludicrous and utterly false.''

Chuck Ardo, an aide to Gov. Ed Rendell, also didn't see state officials as out for revenge.

"Despite our differences with individual reporters, it is the governor's strong belief that the media does a critically important job in a democratic society,'' Mr. Ardo said.

G. Terry Madonna, a pollster and professor at Franklin & Marshall College in Lancaster, said lawmakers often don't like things written or aired about them but they still need the media to get their messages to the public.

"To go after the press would be a very serious mistake by anyone in government,'' he said. "When I first heard what Solobay said, I rolled my eyes, but it's irrational to think government officials would deliberately provoke a war with the media.''

Mr. Solobay, in his voice mail, noted that lawmakers might wait until after the November general election to make "an all-out assault on the written media.''

That means some action could be in the new session starting next January or during the three-week "lame duck session'' after the November election. The lame-duck session stops Nov. 30, the official end of the 2005-06 legislative session.

The three weeks after the election are often a time of frenzied activity in the Legislature. Members who will be leaving office because they lost their re-election bids -- either in the May primaries or the November general election -- can still vote on bills during this three-week period.

Timothy Potts, a citizen activist with a group called Democracy Rising Pa., said he would like to see the lame duck session eliminated.

"It allows legislators to engage in vindictive behavior without voters being able to hold them accountable," he said.

First published on January 21, 2006 at 12:00 am
Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.
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