Facing Uncertainty In House
     The Commission's funding request faces a similar challenge in the House. Top-ranking Republican Christopher Cox of California, who shepherded through the House the Internet Tax Freedom Act — the bill creating the commission — declined to comment openly about the current funding issue. But when the bill was passed last year, Cox said lawmakers had agreed not to fund the commission.
     "Among general representatives and senators, it was a non-starter," he said.
     The House leadership has also conveyed its frustration about the commission's direction. House Majority Leader Richard Armey, along with a dozen colleagues, sent a letter to Gilmore and the rest of the commissioners warning them to consider whether taxes should be applied to the Internet at all rather than simply focusing the discussion on how they should be assessed.
     "If they say they want to tax the Internet, we'll say, 'fat chance'," said Armey spokesman Richard Diamond. "Gov. Gilmore is doing a great job, but if the commission spends its time to find ways to tax the Internet, I'm not sure we'll be finding money in a tight budget."
     Sen. Ron Wyden, D-OR, who managed the bill creating the commission in the Senate, said he would discuss the issue with Lott, but couldn't promise funding. He and Cox both said last week they would consider extending the life of the commission if it looked like it was nearing a consensus but running out of time.
     Sources on and off Capitol Hill indicated that lawmakers were lobbied heavily by Gov. Michael Leavitt, R-UT, to not fund the commission. Leavitt, who is on the commission, was interested in heading it and hinted that the major state and local government associations would pick up the commission's tab to keep it independent of the federal government.
     But National Governors' Association (NGA) Director of State Federal Relations Frank Shafroth said no such deal was cut. Leavitt now heads the NGA.
     "That's not the case," he said. "The sponsors on the Hill were clear they weren't going to put money into it."
     Shafroth added that the commission's $2 million request and somewhat extravagant spending haven't helped its case before Congress.
     "At each step along the path they've made it difficult," he said. "It's a pretty extraordinary budget."

Adding Up The Expenses
     At the commission's first meeting in June, Executive Director Heather Rosenker presented a $1.7 million budget which Gilmore intended to fund with $150,000 donations from each of the commissioners. When that idea was shot down by the panel, the members agreed to allow the state of Virginia to contribute $150,000 along with each corporate member pitching in $50,000.
     Shafroth said the National Tax Association's special electronic commerce committee, which had 40 members, was able to fund 2 ½ years of meetings by collecting $800 from each panelist.
     Rosenker said the panel has enough contributions to cover its December meeting in San Francisco, but added that she was unsure if there would be enough to last through to the final March meeting in Dallas.
     "We started like a new business would, except it was a business with no money," she said. "It's such a minimal amount of money we're talking about."
     The commission spent $150,000 for a two-day meeting in Williamsburg that included dinner for the commissioners and their staff for $175 each, for a total of $12,250. The panel also shelled out $23,125 for transportation for commissioners, their staff and speakers, consisting largely of 30 airline tickets at $750 each.
     Rosenker said the caliber of the commissioners justified the high dining costs.
     "We're a different level commission with the likes of three governors," she said. "The dinners have allowed for wonderful continued discussions."
     At this point, Rosenker said she continues to wait for Congress to take some action on the commission's funding. The appropriations bill the commission is counting on is stalled, and it's unclear when the House and Senate will meet to hammer out a compromise.

Assuring A Future
     At the group's September meeting in New York City, Commissioner and AT&T CEO Michael Armstrong, who heads the panel's funding subcommittee, assured his colleagues that Congress would fund the panel, adding that he would work with the Clinton administration and lawmakers to make it work. The administration's representatives on the commission opposed the budget because of the compensation allotted to Rosenker — a $176,814 salary and benefits package.
     "We're hopeful the appropriations process will come through," Armstrong said. "Everything in Washington is a negotiation."
     Armstrong spearheaded an August letter to Congress asking for funding, but the commission still hasn't received a response.
     "Typically, when Congress creates advisory commissions to look at important issues, it also provides appropriate funding for the commission to carry out their duties," the letter said.
     But Shafroth said that with tight spending caps, lawmakers might not want to draw attention to themselves by funding an Internet tax commission over some other project.
     "People are going to be nervous about doing it," he said. "There seems to be a fair amount of dipping into Social Security."

- by Rebecca S. Weiner