In today's economic environment, governmental entities are facing two conflicting stresses as they strive to efficiently operate their fire departments. First, most cities and counties are seeing a decrease in their tax base resulting in declining revenues putting tremendous strain on their financial budgets. Also, they are seeing consistent, if not increasing, demand for emergency response calls to their fire departments. Thus, fire departments are seeing their budgets decreased while trying to deliver timely and high quality emergency responses as deserved by the public they are serving.
The cities and counties and their fire departments are trying to cope with these issues. They recognize the large tax burden that is already being borne by their residents and realize a tax increase isn't the correct course of action. They also know accident victims deserve the highest level of response to protect property and, more importantly, prevent loss of life. They don't want to enact measures (brownouts, layoffs and longer response times) that will reduce the levels of service, although many departments have already been forced to take these drastic steps. Therefore, fire departments are searching for non-traditional answers to avoid the unacceptable responses of increasing taxes and/or decreasing levels of service.
One such measure is being adopted by more and more fire departments and their cities and counties. These departments are deciding to file claims against the at-fault responsible party in emergency incidents to reimburse them for the mitigation cost of emergency responses. Although the process may vary depending upon the applicable state law, generally the fire department's city or county will adopt an ordinance that sets forth the terms of their cost recovery program. The ordinance will be adopted by the city or county and the fire department will then have the authority to file claims to recovery their actual costs for mitigating emergency response services.
Many local governments see their Fire Departments as infrastructure provided by tax payers, but believe the cost of mitigating a various incidents should be borne by the responsible party.
When motor vehicle emergency response fees are discussed with the average citizen they are generally opposed to them. However, in most cases they are not fully educated on the issue. They become more accepting when they understand only at-fault drivers will be responsible for the claim and not every driver involved in an accident. Next, they are usually concerned about the impact the emergency response claims will have on their insurance rates. In most instances, the costs to mitigate an emergency response is less than $450 so the cost per incident is not excessive (however, for fire departments making numerous emergency response calls the volume can become quite a burden upon its resources). Without delving into the process insurance companies use to determine their rates, it is reasonable to assume that any insurance increase will be passed on to at-fault drivers in the form of higher premiums. While it is possible a portion of the insurance companies increased costs will be spread to all policy holders - it is more likely any relatively small increase will most likely be paid by the at-fault drivers.
As the average citizen begins to understand the nominal size of the emergency mitigation cost and their probable minimal impact on their insurance premiums they generally become more accepting of the concept. Finally, when citizens realize filing claims for emergency response mitigation is the only acceptable alternative for many fire departments they come to accept the policy.
Insurance companies are not in favor of emergency response claims. Besides maintaining that insurance rates will rise as fully discussed above, they talk about double taxation and discrimination. Insurance companies state existing taxes should cover emergency response fees and that filing emergency response claims is like double taxation. As discussed above, there is ample precedence for charging fees for the use of services or facilities in government and these are not considered double taxation in those similar instances.
Is this double taxation?
The short answer is no, it's not. In fact, not billing is more likely double taxation. All of us paying an insurance premium to cover these costs, and then having our cities use tax money to cover these costs is double taxation. Our service is simply the attempt to recover a portion of the costs incurred to mitigate an emergency incident.
The confusion lies in the misunderstanding of the “Municipal Cost Recovery Rule”. This rule bans government agencies from suing for some response costs. The courts came to the conclusion that this was a type of “taxation through litigation”.
The court felt, however, that if the local government agrees that the costs of certain public services should be borne by the parties whose conduct necessitates that service (rather than the taxpayers in general), then it has the right to enact a statute by ordinance or resolution to expressly authorize recovery of such cost.
Virtually all state legislatures have passed laws stating that the responsible party is liable for the mitigation costs of those incidents, rather than the taxpayers in general. Most municipalities need to pass ordinances to specifically define what they will hold the responsible party accountable for.
Insurance companies also state the insured driver is being discriminated against because uninsured drivers will more than likely not have to pay for emergency response fees. Uninsured drivers run the risk of great financial exposure from driving without insurance and, in most states, are at risk of having their car impounded and/or losing their driving privileges. Most prudent people will not feel they are being discriminated against because they have insurance to protect themselves and their families in case of an accident.
Simple Facts:
There is no out of pocket expense to taxpayers. All costs recovered are a direct benefit to the taxpayer and the community in which their safety service department is committed to protect and serve.
This is nothing new. Hundreds of fire departments nationwide have been billing for these services for over 15 years.
Most communities have three choices:
A - Lower the service provided (brown-outs, longer response times, etc.).
B - Increase taxes to cover your actual costs.
C - Bill those causing the use of your services, their fair share of the mitigation costs.
Our interpretation of the law is that most states (email for specifics on your state) and our federal government are neither pro nor con - they're ambivalent. They are simply leaving it to the local level government to determine if it's something they want to do. In most states, if a local government wants to bill, they can pass an ordinance and it becomes legal in that area.
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