Sen. Allie-Allison Petrus, Senate majority leader, said Tuesday he strongly opposes the Prosser-V.I. land-for-tax breaks deal. Petrus said the proposal amounts to special legislation that would raise many legal problems.
"Unlike most of my colleagues, I look at this issue from a legal standpoint and ask the question of whether or not our local government can or should create special tax legislation for Mr. Prosser that would contradict the intentions of the Telecommunications Act of 1996, and Section 932 of the Internal Revenue Code that prohibits a discriminatory tax system," Petrus said in a release from his office.
Petrus said the Prosser plan "would constitute blatant discrimination," referring to Prosser's cellular company, VitelCellular, which competes with Cellular One.
"By granting Mr. Prosser's companies a 30-year tax break, our government would create an unfair, noncompetitive market environment that would guarantee Mr. Prosser a virtual monopoly in many areas of the telecommunication industry," Petrus said.
Petrus said he thought the Telecommunications Act was intended to increase competition in local markets. "Congress clearly intended to eliminate monopolies in local markets," he said. "It is clear to me that my colleagues don't understand the dangers of creating special legislation in the telecommunications industry for a single player."
"Despite the sweet carrot that is being offered to our people, I guarantee, if we decide it is worthy to protect Mr. Prosser from market competition, it is the people that will eventually suffer from the 'take it or leave it' price structure that will soon be established," Petrus concluded.
Editor's note: See earlier story about four senators pressing to get the Prosser deal back on the table.