You are going to see this debate more and more in the next few years, as cash strapped states and municipalities look for ways to plug the fiscal dykes that threaten to become floods of deficits.
Last fall, as the Bloomberg administration grappled with a multibillion dollar budget deficit, the FDNY and the mayor decided New York City should join a growing number of municipalities around the country that are charging motorists involved in accidents for emergency-response services. This so-called “crash tax,” or “accident tax,” is slated to start July 1 and is expected to draw more than $1 million in revenue a year.
via Rocky Road for ‘Crash Tax’ – WSJ.com. Of course, the law doesn’t use the word tax in its wording. That word was added by the opponents of the idea, which is why you always see it in quotes.
The insurance industry is the main opponent of this fee, because of course these costs could (and in some markets, already do) get passed on to them! Lions and Taxes and Fees, OH MY!
Why, just this week, the National Underwriter Website Property Casualty 360 published this story about the opposition to the tax;
The insurance industry says the practice is tantamount to “double-taxation,” and many times insurance policies do not cover the so-called crash tax, or “accident tax.”
In the wake of the recent news that GE paid NO income taxes, (not to mention the taxpayer bailout of the insurance giant AIG), my sides ache from laughing my ass off about this “double-taxation” comment. Is this just some bullshit to stir the ire of the Tea Party drones who don’t want to pay taxes for the first time, much less twice? This isn’t double taxation any more than a highway or bridge toll is. It’s a user fee. The reality is, these services cost money, and the trend now is to collect from the users of the service, because the providers (cites and states) aren’t getting enough “single-taxation” dollars to support it.
You don’t think this is about insurance? Here is a quote from the Fire Department: [full story here]
The FDNY says: “We want to relieve pressure on the taxpayer and place it on those at fault and their insurance. (emphasis mine)
If you Google NYC Crash Tax, and read some of the news, you see that most have quotes from insurance company spokesmen opposing this idea. In fact, I think many of the “news stories” are just reprints of insurance industry press releases. They have mounted a campaign to brand this as an unfair tax, instead of a fee for services for which they are in part beneficiaries.
Regular readers of RRR know that we’ve been posting about strategies public agencies are exploring to recoup the costs of emergency services for years. It is our belief that, aside from the individual who gets rescued, it is the insurance industry who benefits the most financially, because they don’t usually participate in the funding of local rescue agencies. Past posts on this topic:
http://www.redrightreturning.net/maine-ski-resort-to-charge-for-9-rescues
http://www.redrightreturning.net/fines-for-hiker-rescue-in-new-hampshire
http://www.redrightreturning.net/block-island-town-weighs-in-on-fee-for-rescue-issue
http://www.redrightreturning.net/nasar-opposed-to-billing-for-sar
http://www.redrightreturning.net/two-ends-of-the-spectrum
http://www.redrightreturning.net/ky-city-to-charge-for-vehicle-accident-response
