Our View: State's deal with Charter is a win for taxpayers

The people of Montana were the winners in an out-of-court settlement announced last week that let Charter Communications keep $9 million of the $34 million the state says it is owed.

Going forth, Charter will pay a tax rate of 6 percent that the state charges other telecommunications firms, not the 3 percent charged cable television companies.

To us, that sounds like a victory for the state and its taxpayers.

Charter and its predecessor companies had been charged at the 3 percent rate over the years, but the company expanded from a traditional cable television firm into a company that provides telephone and Internet services.

To the state, it seemed that Bresnan Communications, one of Charter's predecessor businesses, had morphed into a telecommunications firm and should be paying the same rate as it competitors.

The Montana Supreme Court upheld the state’s ruling, and Charter said it would simultaneously appeal to the United States Supreme Court and the voters of Montana.

Charter officials thought that voters would feel sorry for the poor company and agree to lower its tax rate and let all other taxpayers pick up the difference.

Charter started circulating petitions asking for an initiative vote this fall. Paid petition gatherers were sent out around the state collecting signatures calling for a referendum, but they backed off from this effort as part of the settlement with the state.

Was this a ploy to get the state to the negotiating table? It seems unlikely Charter really thought voters would fall for this scheme.

But the Montana Department of Revenue negotiated a settlement that seems to us to be very much in favor of taxpayers.

The state contended that Charter owed $34 million. Charter agreed to pay $25 million. Going forward, the company will pay at 6 percent. And Charter agreed to drop the silly idea of an initiative vote.

All in all, the deal sounds very fair. The state won’t have to pay legal fees for a Supreme Court case, and taxpayers will get their $25 million out of the deal.