California motorists beware: you may be victimized by an onerous and burgeoning practice by local governments to tax you just for being in an accident.
More and more cities, fire districts and other local governments throughout California are balancing their budgets by imposing a fee – a crash tax – for dispatching emergency equipment and personnel to the scene of an accident.
Certainly, cities and counties are facing enormous financial challenges during these hard economic times, but this new taxing scheme is just plain unfair.
The tax is nothing more than double taxation and taxation without representation. Property taxes already pay for emergency services. So a resident of a jurisdiction that charges the crash tax pays for emergency services twice – once through property taxes and then again through the crash tax. And out-of-town motorists have no say – or representation – when socked by another jurisdiction’s crash tax.
Sadly, affected drivers are victimized twice – once by the accident and a second time by local governments taxing them when fire and emergency equipment are dispatched to the scene.
The tax, in fact, is becoming so popular among local governments that it now looks like the only way to curb or stop it is through state legislation imposing an outright ban. Otherwise, it will just be a matter of time until the state is blanketed by a crazy quilt of accident taxes.
It’s difficult to document the number of crash taxes in California because of the state’s huge number of local governments. The best estimate today is there are between 40 and 60 cities, counties and special districts that have imposed or are about to impose the tax. Most of the crash tax schemes are administered by vendors who keep a portion of the tax they collect which can be more than 20 percent.
Communities that have already imposed the tax include Roseville, Fallbrook, Redlands, Fresno County Fire Protection District, Manteca, Oceanside and Stockton.
The local ordinances vary. Some impose the tax on just out-of-town motorists involved in accidents. Others tax all drivers, locals and non-locals alike. Still others tax just at-fault drivers or bill only the drivers’ insurers – which means uninsured motorists are off the tax hook even though they are disobeying the law.
The city of Sacramento is now considering an ordinance that would not only tax accident victims, but also homeowners when they have a house fire. A tentative hearing to consider the proposed ordinance is upcoming.
Other cities are branching out into an even more troublesome practice – taxing 911 calls. Some municipalities, including Tracy, charge residents and non-residents hundreds of dollars each time they make a 911 call in that jurisdiction. A couple living in the Southeast recently attempted to put out their house fire with a garden hose because they were concerned their community charged a tax on 911 calls.
Obviously, this taxing frenzy is not unique to California. But, California seems to be experiencing one of the fastest growth rates of crash taxes. Proponents of this tax argue that the victims don’t pay the tax, their insurers do.
It’s true that some auto insurers pay the tax as part of their policies’ coverage. But others do not. Therefore, some accident victims could be stuck paying the tax themselves. The tax can run $2,000 or more.
Ultimately, if this trend continues, everyone is going to feel the pain of this new tax. If the accident tax schemes continue and insurance policies pay for the tax, insurance premiums will have to reflect the cost of the tax.
California has to establish a sensible public policy on this issue. Budget challenges don’t justify forcing accident victims to pay for services that they already are paying for through their taxes.
And local governments should not be allowed to create tax traps for unwary out-of-towners who are in accidents.
Finally, local governments should not let themselves be fooled by the mistaken notion that insurers will pay the levy and no one will get financially hurt by crash taxes. In the end, drivers pay one way or the other.
Providing emergency services to accident victims is a fundamental government function. It should not be turned into a money-generating opportunity through the imposition of unfair crash taxes.