Global Economic
Trend Analysis

Recent Posts

Friday, December 31, 2010 6:46 PM

"Crash Tax" Ripoff Expands in California and New York

Mish Moved to MishTalk.Com Click to Visit.

You pay taxes for services. At least you think you do. Fifty cities in California think you don't. They tax the hell out of you, then bill you if you need services. Drivers who cause accidents in at least 50 cities can be billed for the police and firefighters who show up.

Please consider 'Crash taxes' are growing in popularity among cash-strapped California cities

At least 50 cities in the state have adopted so-called crash-tax laws allowing local governments to seek reimbursement from insurance companies for the costs of sending public emergency crews to accident scenes. The fees can amount to hundreds or even thousands of dollars. If insurers don't pay, cities can hire collection agents to seek payment from the motorists involved.

Sacramento, with nearly half a million residents, soon could be the largest city in California to do so. The City Council has scheduled a vote next month to establish what it's calling a "fire cost recovery charge." The fee would reimburse the city for a variety of emergency-related chores, including cleaning up hazardous fluids, putting out vehicle fires and responding to gas line explosions and downed power poles. Proposed fees would range from $432 for a "scene stabilization" to $2,275 for a helicopter evacuation. The measure is expected to raise as much as $500,000 a year, city spokeswoman Linda Tucker said.

"To me, it's an outrage. We're already paying these people — the police department, the fire department, the emergency vehicle drivers — handsome salaries and benefits," said Lew Uhler, president of the National Tax Limitation Committee. "Either we stop this kind of nonsense or we should quit paying taxes for these kind of services."

The practice isn't limited to cities in struggling California. It's gaining momentum nationwide as cash-strapped communities seek a way to offset budget cuts.

This month, New York Mayor Michael R. Bloomberg proposed charging drivers there as much as $490 when firefighters respond to an accident or a vehicle fire, beginning July 1. A public hearing is set for January.

Local taxpayers shouldn't have to pay for accidents they had no part in creating, said Costa Mesa Fire Battalion Chief Bill Kershaw.

"Someone has to pay for the cleanup," he said. "We're subsidizing the insurance companies" if cities don't collect from the responsible parties.

At least 10 states, including Florida, Georgia and Pennsylvania, have already banned the collection of accident-response fees, according to A.M. Best Co., an independent insurance information service based in Oldwick, N.J.

But California cities and the companies they hire to collect accident fees are gearing up for a fight. The Strickland bill would prohibit local governments from collecting for all types of emergency services, including fire, police and medical, they said.

Such a ban "could devastate city services and economic health," the League of California Cities said in a letter to lawmakers.

Insurance companies are trying to harness populist antitax sentiment, typified by the "tea party" movement, to protect their own profits, said Rick Benner, chief financial officer of Fire Recovery USA.
The gall of Rick Benner of Fire Recovery USA and Costa Mesa Fire Battalion Chief Bill Kershaw infuriates me.

Firefighters together with police unions they have bankrupted most cities in the nation. Public union firefighters and police (in general) are the most overpaid undeserving ungrateful ingrates the country has ever known.

Those statements will annoy many, but it is the truth, in general, especially for the larger cities. If you are a small town police officer or firefighter with few benefits then what I said may not apply to you.

I would gladly support collection measures if tax dollars did not already go to overbloated, untenable public union pension contracts.

Spare me the sap about how dangerous the jobs are. Please consider the 8 Most Dangerous Jobs in the World

1. Fishermen
2. Pilots and airline employees
3. Loggers
4. Structural construction workers
5. Waste management employees
6. Farmers and ranchers
7. Power-line technicians
8. Roofers

The true heroes deserving of respect and appreciation are volunteer fire departments.

The problem is expenses not lack of revenues. Cities ought to outsource both police and firefighters, the latter to volunteer departments in return for reduced or eliminated property taxes.

How many people do you think would volunteer for a few days a month in return for elimination of property taxes?

I bet enough to get rid of nearly every public union fire department in the country.

Please see In Praise of Volunteer Fire Departments
for an email response from a 20-year police and fire union worker, and my rebuttal to his response.

Mike "Mish" Shedlock
Click Here To Scroll Thru My Recent Post List

Last 10 Posts

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats