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California cities' latest budget trick: fine out-of-towners for car crashes

California cities are adopting 'crash taxes' that fine out-of-town motorists who are found at fault in accidents that require a response from emergency personnel. The fines can exceed $2,700.

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A nationwide Harris Interactive poll suggests support for such a measure. In it, 76 percent of respondents said that taxes should be sufficient to cover emergency response to traffic accidents. Six in 10 said charging fees is wrong, according to the poll, which was done for the Property Casualty Insurers Association of America.

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“Thousands of drivers come to Sacramento each day to shop, work, park, stay in hotels, dine in restaurants, and attend entertainment events,” says Sam Sorich, president of the Association of California Insurance, which opposes the fees. “This ordinance tells these supporters of Sacramento’s economy that they are second-class citizens who are not welcome.”

Many of the city laws are subtly different, with some charging fees for helicopter rescues, others for use of the “jaws of life,” and others for the cleanup of hazardous materials. Mr. Sorich says insurance companies will try to go after other companies potentially liable – tire manufacturers, windshield wiper makers, and so on – to try to pay a part of the fee.

Where crash taxes didn't work

In Roseville, Calif., however, the fee has not been the fiscal boon that was expected. On Wednesday, officials are scheduled to reconsider the crash tax they instituted 18 months ago. City Manager Ray Kerridge says it was an experiment that didn’t work out.

“There were expectations that it would bring in a certain amount of revenues for the city,” he says, “and those revenue projections were not met – even close.”
The program netted them $40,000 instead of the projected $100,000 per year, he says.

But the fees are not supposed to be a revenue generator, says Dorothy Holzem, associate legislative representative for the League of California Cities.

“This is cost recovery for a state recovering from a budget black hole,” she says. “All these cities are trying to do is maintain 24/7 response for their residents.”

To some experts, the fees are merely an extension of fees like the hotel occupancy tax, which intend to have transients help pay for the local services they use.

The appeal “is that transients can’t vote against the people who imposed the tax,” says Jack Pitney, professor of government at Claremont McKenna College.

“It probably won’t have much immediate impact on business or tourism,” he adds. “Most people don’t start a trip expecting that it will end in a collision. In any case, many transients won’t even know about the tax until they get the bill.”

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