The Tale of an Abused Tax By jlammers
January 15, 2009, 1:21PM
(First published Sept. 21, 2008)
The cell phone bill
says "9-1-1 Service Fee": $1.20. You pay it every month to
But only six cents
end up at a 911 center. Instead, the state
spends the money on itself: overtime, fringe benefits, travel, vehicles, new
boots, clip-on ties, sun block, spray paint, groceries, dry cleaning and other
daily expenses for agencies ranging from the state police to the departments of
corrections and parks, state records show. The National Guard,
for example, spent almost $1 million at The state imposed the
fee to raise enough money to upgrade 911 technology so dispatchers can find you
when you call from your cell phone and can't talk. State Assemblyman
David Koon, D-Fairport, knows first-hand how important that is. Dispatchers listened
helplessly to the last 20 minutes of his daughter's life when she dialed 911 on
her cell phone and they couldn't find her. Jennifer Koon was abducted from a
suburban shopping mall, raped and shot in 1993. Koon still has the 911 tape. He fought to keep
money flowing to 911 centers to buy equipment to find the next cell-phone
caller. Every county in
The fee may have
started as a well-meaning temporary tax. But in typical The state's latest
move shows the attitude toward this steady income. First, state
officials promised to spend up to $2 billion from the fee to build the world's
biggest wireless emergency radio system for the state's first responders. But
that system keeps failing tests. So Gov. David
Paterson last month redirected $40 million from that project to the general
fund to be used for anything. "People are so
used to paying that $1.20 to the state every month that nobody really pays too
much attention to it," Koon said. "So, it's just another revenue
stream the state is using now." Where it goes Here are some ways
the state has spent your $1.20-a-month since 2002, according to state
comptroller's office records. Millions of dollars
covered salaries at various state agencies. About $24 million went for overtime
at agencies including the departments of corrections and parks. About $225,000 bought
clothing and footwear. Nearly $20,000 paid for laundry and dry cleaning
services. This year, expenses
included two $153 hard hats and four pairs of $78 snowshoes for the Office for
Technology. The State Police spent $18,600 on pants, shirts, jackets and tie
bars. Two agencies -
technology and agriculture - spent almost $60,000 from cell phone customers
last year to pay their own cell phone bills. Over the years, the
fee has also covered $15,500 on interest and late payments to businesses
ranging from pizza places to the major law firm working on the statewide
wireless network, records show. How it happened
Ten years later, the
annual revenue had reached $43 million. By 2002, state police
were spending the money on vehicles, conferences, dry cleaning and clothes. An
audit by then-Comptroller H. Carl McCall criticized state police for the
practice. So the state made the
law more vague. The state Legislature and the governor changed the law to say
the money could be spent on anything having to do with homeland security. While
they were at it, they added another 50 cents per month to the fee and directed
it to the state's general fund, for any expense. Meanwhile, the 911
centers still could not find all cell phone callers. Koon and others
argued that more money needed to go to the 911 centers. The New York State
Association of Counties lobbied for at least one-third of the annual revenue. The state said no. Instead, the
Legislature passed another law that allowed counties to add another 30 cents to
cell phone bills. That brought the total bill to $1.50 a month in But the 911 centers
still could not find all cell phone callers. In January 2003, four
young men died in a boating accident off the coast of With no support from
the governor's office, the Legislature relied on an old standby: They borrowed
the money. The Legislature
passed a bill, and overrode a veto by then-Gov. George Pataki, to borrow $100
million for the counties. The state will pay 3 percent to 5 percent interest to
borrowers by tapping future cell-phone taxes. Across the state, 911
centers split up that money. But local taxpayers and not the state paid most of
the bill for the improvements. The state contributed
$1.6 million. The rest came from local property taxes and income from a 35-cent
fee on land telephone lines. The county gets about
$400,000 a year from the cell phone tax. It doesn't buy much, said John
Merklinger, 911 director for "My personal
opinion is, it's pretty sad the state keeps raiding the money," Merklinger
said. "The problem is, I think the public thinks the money is being used
for 911 and I don't think it is." Still waiting for wireless network The state's latest
move shows how little reverence is paid to the original purpose of the fee. The state, during
Gov. George Pataki's term, promised to use the 911 cell phone money to pay for an
emergency radio system called the Statewide Wireless Network, or SWN
(pronounced "swin"). The $2 billion system
is intended to connect state police with all emergency officials - such as
environmental police, Michael Balboni, the
state's homeland security chief and a former state senator, said the
Legislature thought the 911 surcharge was an appropriate funding stream for the
SWN because it would enhance the ability of crews to respond to emergencies. State officials say
they have spent $51.5 million on engineering fees, equipment and day-to-day
expenses. In the most recent
year, those expenses have included about $73,000 on travel, lodging and food.
The office paid for books, membership dues for trade associations and fees to
send staff to In the last year, the
state SWN office spent about $1.1 million on "fringe benefits," which
includes health and dental insurance and retirement contributions, according to
state records. But the company the
state hired to build the network has, so far, not been able to pull off the
project. An electronics
company called M/A-Com won the bid to build a system that would be tested in The most serious
problem was that first responders lost stable contact when they left their
vehicles. The portable radios they wear on their hips and shoulders are
supposed to be able to repeat a signal to the car radio, but that connection
does not consistently work, officials said. At the end of August,
the state Office for Technology told M/A-Com that it had defaulted on its
contract and gave the company 45 days to fix the problems. If they cancel the
contract, state officials say, M/A-Com will have to repay up to $100 million,
including the travel and other day-to-day expenses, to the Office for
Technology and the Office for Homeland Security. A spokesman for the
governor said the contract is silent on whether counties and other state
agencies will be paid back. Local governments and
other state agencies spent about $7 million on equipment associated with the
SWN last year. SWN officials say counties and other agencies would have bought
some of that equipment anyway. Again, local
governments are on their own. The state intends to
use the cell phone tax to pay for only its part of the system. If counties want
to tap in, they have to find the money elsewhere. So the county decided
to buy different equipment and hope that it someday patches into a statewide
system. Then, county officials had to come up with $34.7 million to pay for it. John Balloni,
"That amount of
money would literally void our need for a local surcharge to pay for this
because there is enough money being collected on the state surcharge to pay for
this project," Balloni said. Federal government not pleased The state's spending
has also annoyed the federal government. Congress has warned
states that it will punish those who raid their enhanced 911 revenue for other
things. Congress passed a law
in 2004 limiting federal 911 grants to states that do not divert their own 911
revenue. A spokesman for the federal agency in charge said it is too early to
say how much U.S. Sen. Hillary
Clinton was a co-sponsor of that bill. A With the original
purpose of the fee accomplished, one option is for the cell phone tax to go
away. But cell phone users
will have to pay off that $100 million in bonds at least through 2016. And if
the SWN is built, the state will have committed the money for decades. The state continues
to find new uses for the money.
Now, cell phone
customers will send another $40 million over the next two years into the
general fund, to be used for anything. Michelle Breidenbach can be reached at mbreidenbach@syracuse.com or
470-3186. |