THE NEWS SERVICE OF FLORIDA: Legislative move to prevent cities from charging emergency response fees
Mar 9, 2009
Counties and cities would be prohibited from imposing fees for emergency agencies to respond to accidents under legislation filed in response to the growing practice.
With local governments strapped for cash, a number of them are seeking extra cash when they’re called out to car accidents, billing at-fault drivers when a fire engine is called out, for example.
The practice is increasing in part because of dwindling local tax collections that are threatening emergency response budgets, but probably also because the fees are being pushed by an Ohio company that is offering to help local governments in collecting the fees.
Several Florida communities have at least considered the fees and a handful have actually imposed them, including the city of Tallahassee, which has passed an ordinance to charge a response fee for at-fault drivers in accidents. The city had considered such a fee for a long time, but only moved to impose it recently when the economy went south just after a property tax cut that forced the city to re-examine its budget, said Nancy Herndon, division chief of logistics and planning for the Tallahassee Fire Department.
The city has a deficiencies fund for when its agencies come up short, and that fund has dropped considerably, hurting the city’s bond rating.
“We had to look for a way to replace that revenue,” said Herndon.
Don’t city residents already pay taxes to fund the fire department?
“You’re paying for basic services,” with those taxes, argues Herndon. And it’s not paid by everyone who uses the fire department – which responds to plenty of accidents involving drivers who don’t live in the city and don’t pay those taxes.
Sen. Mike Bennett, R-Bradenton, and Rep. Nick Thompson, R-Fort Myers, have filed legislation (SB 2282, HB 1043) that would prohibit the fees. They plan a news conference on Tuesday to discuss the proposals, though the bills haven’t begun moving yet.
Auto insurers are pushing hard for a ban on the fees.
“We think they are absolutely inappropriate,” said Sam Miller, spokesman for the Florida Insurance Council, which represents several insurers. Miller said it amounts to charging people twice – through their taxes and then through the fee – and that it may end up costing drivers in higher insurance rates if it becomes common enough.
Right now, some car insurers will pay the fee if one of their customers is charged, but many others won’t.
For many small accidents, the fee wouldn’t be covered anyway, because it would often be less than the deductible. The fees typically are a few hundred dollars.
William Stander, a lobbyist for the Property Casualty Insurers of America, said most companies aren’t including the fees in auto policies, but some are paying them “just to keep the customer happy.”
Still, the industry is pushing hard for the ban.
Stander said cities and counties are trying to “make an end run,” around Gov. Charlie Crist, who pushed for the property tax decreases that many cities have said have hurt their budgets.
“Public safety is a primary duty of local government and they need to pay for that with broad-based funding,” Stander said.
Dayton, Ohio-based Cost Recovery Corp. has helped a number of cities enact the fees. Opponents of the fees say the company is very aggressive in trying to get cities to adopt them – and that’s part of the reason the fees are on the increase.
“Most of these cities wouldn’t have dreamed of this on their own,” said the Florida Insurance Council’s Miller. “They were approached and told ‘You have a great opportunity.'”
The company says on its Web site that the idea isn’t about generating new income, but recouping lost revenue from out-of-towners.
“This program’s primary function is designed to recoup the money spent by taxpayers for services provided to NON-taxpayers,” the CRC Web site says. “Communities recycle that money back into the budget for services that directly benefit the taxpayers.”
Fire department crash charges go back to the late 1990s, and ambulance charges longer. CRC started helping cities collect police department response fees in 2004.
CRC says about half of insurance companies are paying the fees – though the company contends its partly because well-staffed and well-equipped emergency responders keep losses down.
The Ohio company also says no auto insurers have raised rates because of the fees.
Neither Bennett’s nor Thompson’s bill has received a committee assignment yet.