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March 1st, 2006 Ian Demsky | News Stories
 

Cell Division

Portland's proposed cell-phone tax may end up unfairly targeting minorities.

     
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IMAGE: STEVE LIEBER
"Driving while black" is a well-chronicled fear for African Americans who spot a cop's lights flashing in their rearview mirror. And talking on your cell phone while driving is hazardous for all races.

Now, recent discussion of a cell-phone tax in Portland has led WW to find a third potential danger that combines the two, in or out of a car: using a cell phone while black.

One of the few concrete suggestions to come out of Mayor Tom Potter's recent school-funding summit was the resurrection of a proposed 5 percent tax on local cell-phone service. But WW has identified one segment of the population that might bear a bigger burden from such a tax: Portland's minorities.

Blacks use almost twice as many cell-phone minutes per month as whites, according to the most recent figures from the San Francisco-based industry research group Telephia.

In the third quarter of 2005, black customers averaged 1,220 minutes per month, nearly double the average of 632 minutes among whites. Hispanics also substantially beat out whites with 979 minutes, according to Telephia's analysis of monthly bills from more than 30,000 subscribers nationwide to the top five wireless providers.

In that quarter, Telephia found blacks paid an average of $69.42 per month, compared with $52.05 for whites and $60.31 for Hispanics.

The reasons for the difference are up for debate, but here's what its effect would be locally if a 5 percent tax were enacted.

In Portland, whites make up about 80 percent of the population and would therefore be shouldering most of a new tax burden, which Commissioner Randy Leonard estimates could generate anywhere from $8 million to $20 million a year for Portland schools.

But extrapolate the numbers from the Telephia analysis, apply a 5 percent tax and you'll find the typical black customer would pay more in cell-phone tax than a typical white customer by about one-third.

While the dollar amounts wouldn't be so high (blacks would pay about $10 more per year than whites, according to WW's calculations), it does raise questions of unintended consequences.

(To be fair, cell-phone providers could decide to eat the loss and not pass the new tax along to customers.)

Assuming a tax increase raised bills proportionally, an added 5 percent shock to blacks and Hispanics' cell phone bills would be a double whammy: Not only would they face higher bills, but they also earn less than whites and those dollars make up a higher percentage of their total income. As of 2000, the median household income for Portland's whites is $41,000, compared with $27,000 for blacks and $32,000 for Hispanics, according to the U.S. Census.

State Sen. Avel Gordly (D-Portland), who is African-American, has been a supporter of the cell-phone tax and says she wants to see cell-phone usage statistics for the Portland area before judging whether anyone would be hurt unfairly.

"There's value in asking the questions," says Gordly. "I think with any form of tax or method of gathering revenue, we would want to understand the full implications and impact on those who would bear the costs."

Charles McGee, a 20-year-old African American who ran unsuccessfully for a seat on the Portland School Board last year, said he wouldn't support a tax that was regressive for minorities.

"I do believe something is needed, but I don't think disproportionately taxing one group of people would be that [solution], especially if the group you're taxing is not the group that is receiving, statistically, the best results from the service," McGee says.

Leonard, the city commissioner pushing the cell-phone tax for schools, says there would be reason for concern if Telephia's numbers hold up. But he's extremely skeptical about the figures.

"I've had a cell phone since their inception and no one has ever asked for my race," Leonard says. "I have a healthy suspicion of industry numbers. I would really want to see who did it, who paid them and how it was determined before I could actually buy into that."

RING TONE

Nationwide, African Americans and Hispanics averaged more cell-phone minutes and paid higher cell bills than othersduring the third quarter of 2005.

GROUPAVERAGE MINUTESAVERAGE MONTHLY BILLESTIMATED MONTHLY TAX
African American1,220$69.42$3.47
Hispanic Origin979$60.31$3.02
Mixed Racial Background888$57.44$2.87
Asian or Pacific Islander845$47.86$2.39
White/Caucasian632$52.05$2.60
Native American/Alaskan623$57.35$2.37
Source: Telephia
 
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