Friday, January 26, 2018

Cell phone safety tax needs to be put where it belongs

If you take a look at your cell phone bill you will see a $1.20 line item called the “New York Public Safety Communications Surcharge”. Originally appearing as an E911 tax, it was put into place in the 1990s – at $0.70 per month – to provide the state with money to upgrade 911 call centers and public safety communications systems. 

By intent, it was a worthwhile tax as emergency dispatchers needed to keep up with the explosive development of wireless phone technology. Plus, as we unfortunately saw during the horrific events of 9/11, interoperability of two-way devices for police officers and firemen was a “must-have” that they didn’t have at all.

But, intent and realty are two entirely different things, especially when it comes to government and money.

Misappropriation might be too strong of a word (since it implies criminality), but there is likely no more accurate term to describe the state’s ongoing misuse of this tax. Of the $14.40 that you pay into the purported use of the tax each year, only around $5.00 goes to where it belongs. The rest -- $9.40 – is put into the state’s general fund and spent on anything under the sun.

At first glance, it may seem like a pittance to some folks, but consider the growth of the cell phone industry since the tax came to be. Cell phones of all shapes and styles are now used by what seems to be every man, woman, and, yes, child in the Empire State. What once was a luxury has taken on an air of necessity. The family that used to share one landline now has wireless devices for everyone in the household. Putting that to numbers: Last year, there were over 238 million cell phones in the United States.  In 1991, when the legislature introduced the tax, there were only 7.5 million cell phone subscribers in the country. That’s a lot of new sources of revenue from which our state – and others – reap.

In recent years, New York State has collected over $185 million annually from the tax. That number is set to grow as, one, more smartphones and tablets are being put into circulation, and, two, the state just put into play in December a revision to the tax that collects another 90 cents at the point of sale on pre-paid phones.   

In most years, only a third to 40 percent of the funds are put to use across the state for their intended purpose. This has been hanging out to dry local taxpayers as their municipalities upgrade their communications system to meet today’s needs and expectations.

Case in point, consider what happened with the new police and fire radio system that was launched in Niagara County two years ago. It was not only necessary by federal mandate (a 9/11 aftermath), but also by actual need: If you listened to the police scanner before everyone went digital in 2015 you heard numerous first responders struggling to communicate with dispatch from radio dead zones throughout the county.

At a price tag of $10 million it wasn’t a cheap investment. Of that amount, only a fifth was funded by the safety communications tax when in theory -- and actual designation of state law -- it should have been fully funded by the cell phone tax. The other $8 million to cover the County’s project had to come from cash flows and borrowing of money….local taxpayers were footing the bill.

It shouldn’t be that way. The state isn’t playing by its own rules when it comes to the tax. It shouldn’t hold the purse strings and pit county against county through a “competitive” grant process for them to get back just a fraction of the amount that was collected. By doing so, the state is tightening the thumb screws on already cash-strapped municipalities and taxpayers while sacrificing their safety in the process.

This legislative session, the Governor and the Legislature need to develop real strategies to keep the tax out of the general fund. They need to do with the tax exactly what was intended, after all, the state already digs into our phone bills at a 4 percent clip every billing cycle. Let them have that and let us have what we deserve and what we need. 

From the 29 January 2018 Greater Niagara Newspapers and Batavia Daily News

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