Commentary

States Plunder 911 Funding

State governments are getting bolder about diverting funds intended to maintain and modernize 911 emergency calling systems for other uses.

As states face greater budget gaps spurred by reckless spending and unsustainable obligations to the public sector employees, legislatures have been turning everywhere for extra cash. The 911 surcharge that appears on most consumer phone bills is no exception.

Originally, 911 fees were supposed to be used exclusively to fund 911 calling centers and the training of operators, the primary rationale behind the decision to assess the fees on phone bills. Instead, 911 money is being funneled elsewhere, sometimes for other law enforcement needs like weapons, vehicles and uniforms; sometimes for cost and services that arguably should be funded from general revenues. In New York State, for instance, of the $600 million collected from 911 fees in the past 15 years, just $84 million—14 percent—was used for municipal 911 center operation, according to a Buffalo News report cited by Emergency Management magazine.

At the national level, Washington has penalties, such as cutting off federal funds, that are supposed to disincent states from diverting 911 fees, but that turns out to be a matter of nomenclature. A number of states, including New York, have simply voted to change the name of surcharge from “911 fee” to “protection fee” to evade any problems.

The recent issue of Emergency Management devotes an article to the sorry state of local 911 systems, laying some of the blame on the propensity of state and local governments to raid the funds.

“We have states out there that are diverting tens of millions of dollars from 911 funds to go into other pots, such as buying vehicles, guns, uniforms and equipment for first responders,” said NENA’s [the National Emergency Number Association’s president Craig] Whittington. “The funds were created to fund 911 centers; we have 911 centers out there with woefully outdated equipment and even the ones with the best equipment need to be preparing for next-generation 911.”

As of press time, NENA was preparing a letter for Congress asking for congressional intervention to stop states from diverting 911 funds, he said. The CTIA [the wireless industry association], NENA and APCO [Association of Public-Safety Communications Officials] come together when they hear that a governor might raid a state’s 911 fees. “In some cases we’ve been successful at getting them to back off, and I know that in Maryland the governor, after announcing intentions to raid, has not taken those funds,” [Brian Josef, director of regulatory affairs for CTIA] said. “But in other states, they need the money and really there’s nothing to sway them from that.”

Telephone taxes and surcharges, which include 911 fees, on average make the levy on phone service twice as high as the sales tax on other products. It’s worth noting that the FCC’s National Broadband Plan proposes a similar structure of fees to fund public safety communications, including a national emergency communications network, and has even raised the idea of taxing Internet service and content. Of course, that assumes states won’t plunder that funding, too. Given the level of tax burden, it’s more than reasonable to demand the fees fund the programs they were created for.

Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.

Titch's work primarily focused on telecommunications, the Internet and new media. He is a former managing editor of InfoTech & Telecom News (IT&T News) published by the Heartland Institute. His columns have appeared in Investor's Business Daily, Total Telecom, and America's Network, among others.

Prior to joining Reason in 2004, Titch covered the telecommunications industry as a journalist for more than two decades. Titch was director of editorial projects for Data Communications magazine where he directed content development for supplemental publications and special projects. He has also held the positions of editorial director of Telephony, editor of Global Telephony magazine, Midwest bureau chief of CommunicationsWeek, and associate editor-communications at Electronic News.

Outside of the telecom industry, Titch conducted rich media and content development for publishers and corporate marketing groups. He has also developed and launched his own web-based media, including SecuritySquared.com, an on-line resource for the security industry.

Titch graduated cum laude from Syracuse University with a dual degree in journalism and English.