04/04/2011

'Crash tax' and other public safety fees target out-of-towners

The fee is one of many revenue-raising ideas being considered by cities nationwide dealing with budget problems

Associated Press

LANSING, Mich. — Out-of-towners would be wise to drive carefully when passing through Fraser, a suburb about 15 miles northeast of Detroit.

The city this year began charging non-residents who cause wrecks for the public safety and emergency response time involved in the accident. The fee is one of many revenue-raising ideas being considered by cities nationwide dealing with budget problems.

Reluctant to raise taxes on their own residents, local governments are looking increasingly at out-of-towners. But critics complain that the fees amount to taxation without representation, or double taxation, since those people already pay for roads and public safety services in their own communities. And unsuspecting out-of-town motorists who've have faced the bills say they send a hostile message.

"You're not welcome here – outsiders not welcome," said Jay Middleton, a Mount Laurel, N.J., resident who fought a "crash tax" charged in a Philadelphia suburb. "That's what it says to me."

Middleton got caught up in the "crash tax" issue after a fender-bender while moving his daughter home from college a few years ago. Radnor Township, Pa., billed him $276.08 for the police time. The concept of governments hitting up visitors for cash isn't new. States often charge nonresidents more than locals for hunting and fishing licenses on the theory visitors don't pay the regular taxes used to support parks and recreation systems. A number of cities impose income taxes on suburbanites who come into a city to work. Omaha, Neb., planned a commuter fee that critics called a "wheel tax" before state lawmakers moved to block it this year.

Across Michigan, cities are struggling to fund their emergency services. The state has lost more than 4,500 police officers and firefighters in the past decade, mostly because of lower tax revenues during the recession and the state's economic decline. Fraser, a town of about 15,000 in southeast Michigan, has lost 13 public safety officer positions since 2006 – a drop of 25 percent.

"I think we are now at the point where it's push versus shove," Fraser city manager Richard Haberman said. "The intent here isn't to gouge somebody. We're not out here trying to make additional revenue. We're just trying to cover costs."

For an accident caused by an out-of-towner, the driver or the driver's insurance company is billed $57.15 an hour for a police officer's time, $43.75 an hour for a paramedic's services and $41.96 an hour for time spent by a public works employee. Many of the fees charged so far have been $100 or less. Fewer than 25 motorists have been charged since the fees began in February, city officials said.

New York City's fire department plans to impose a response fee in July, with charges ranging from $365 to $490 depending on whether a vehicle fire or injury is involved. The fee would apply to residents and non-residents alike.

But it isn't always easy for the cities to collect. Insurance trade associations say most companies won't cover the fees, leading to lower-than-expected revenues for local governments.

Radnor Township in Pennsylvania eventually repealed its accident response fee ordinance, so Middleton didn't have to pay it. The west Michigan city of Wyoming scrapped its fees after a year of bad publicity in 2008 and earning lower returns than expected. A handful of California cities also have abandoned at least some of their emergency response fees or are considering doing so.

Officials in Petoskey, a northern Michigan tourist town, flirted with the fee idea last year but decided against it.

"In a hospitality, tourism-oriented community, it's just not something you do to people," said Carlin Smith, president of the Petoskey Regional Chamber of Commerce. "They've just had an unfortunate situation. You don't make it even more of a misfortune."

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