The unfair assessment of e911 fees posted by Pamela Wilcox on January 10th, 2012 - 11:30 am | Prepaid Services
As with all things in life, 911 services cost money. While our general tax dollars help fund 911 dispatch services, there’s also a specific tax on your phone bill that funds 911. This has extended to postpaid cell phones, wherein each phone line is charged an e911 fee. This helps fund not only the dispatch, but the technology necessary to locate users. Until recently, prepaid wireless users were exempt from this tax. There was just no easy way to assess it. A few years ago, however, some state legislatures decided to begin charge e911 fees. This comes at the point of sale of prepaid refill cards. It’s pretty easy to see, even with scant description, why this is unfair.
The need for e911 tax
As with all government services, e911 requires taxpayer money. It’s a common service implemented for the common good. It wouldn’t quite be in the spirit of emergency services if the EMTs required up-front payment before taking you to the hospital. At the same time, tax dollars are not easy to come by. Our country spends more than it earns, so our government becomes stingy with public fund dollars. That can leave many 911 services hurting for dollars.
If we want to continue providing 911 services, we need everyone to pay into the fund. If prepaid wireless users, a large and growing segment of the population, are exempt from such fees, then we have some people receiving the service and not paying for it. Considering the state of e911 funding, we would do well to find any way possible to provide funding. Since prepaid users don’t pay into the fund, they’re a logical place to start.
(The problem, really, extends to all cell phone users, since the e911 fee for cell phones isn’t quite as high as the 911 fee on landlines.)
Assessing prepaid users
The problem with prepaid users paying into an e911 fund is a matter of logistics. How can we best charge these users for this vital service? State legislators around the country have started with POS charges. Every time a user buys a refill card for their prepaid service, they’re assessed a fee of 50 cents (the common rate). This applies to users who pay for their $50 unlimited plan with a card, and those who add a $10 top-up.
Already we see the regressiveness of the tax. Someone who prepays for a $50 unlimited plan is likely better off than someone who adds a $10 card every week. That $10 weekly top-up can be a necessity; not everyone has the means to pay a lump sum up front every month. Yet by month’s end the $50 user will have paid a total of $50.50, while the $10 top-up user will have paid $42. This is the type of thing we should seek to avoid. But it’s not even close to the biggest problem.
As of now, online refills are not subject to the e911 tax. Again, typically better-to-do users are more likely to pay for their services online, since they’re more likely to have internet access at home. As we’ve seen in the case of Amazon.com and sales tax, it’s difficult to assess taxes to purchases made online. If we can’t get proper sales tax, then imagine what it’s like for e911 taxes.
While I wasn’t able to find any hard numbers as to the percentage of prepaid users who pay online, I have to assume that it’s a good number. Maybe not the majority, but certainly a solid percentage. All those people skip by the e911 tax completely, while those who buy cards at retailers pay it every time. While charging the fee at the POS does help, it still leaves plenty of dollars on the table. It also allows better-to-do users to skirt the fee.
(That’s not to say that lesser-to-do folks should be exempt from the tax. It’s to say that if anyone were exempt, it should be the ones less able to pay rather than the ones who have the money up front to pay for a month’s worth of service.)
Finding a fair way
As we saw in the above-linked article, e911 services are generally underfunded. Yet they cost plenty to operate. They need not only dispatchers, but also SCADA systems to locate callers. These are big expenses that 911 services can burn through quickly. Yet from all angles they’re not getting enough user funding. Cell phone users get charged a lesser fee than their landline counterparts. Prepaid cell phone users can skirt the fee completely. We need a better way to get those funds, so that 911 services can operate for all of us.
The measures passed by various state legislatures show that it’s no simple task. They have power to assess fees at the point of sale, but it’s much tougher for them to enforce a fee from online purchases. Additionally, there’s a strong lobby in Washington that opposes any new taxes for cell phone users. Even a hike in the e911 rate to match landline rates would meet opposition. There might be good intentions, but they’re not leading to fair implementation.
Far be it from me to suggest a viable alternative. I’m not the one in congress, whether state or federal, who knows what’s feasible and what is not. But it’s pretty clear that the current system is harmfully faulty. We need big changes in order to properly fund e911 services. The question is when will someone stand up and convince us that it’s necessary?