Small Business News
August 2004 | Online Edition
New Tax on Cell Phone Users for Enhanced 911
By Christina O'Connor
Honolulu Police Lieutenant Charles Chong was enjoying a ride on his bike when he was hit by a car and sent flying into the air. The impact was so severe that Chong went into shock, became unsure of where he was, and could not call for help, but he knew he needed an ambulance. He also had difficulty speaking.
"I realized that I did not know where I was and I could not talk because I had bitten through my tongue. But I knew I needed to call 911," Chong says. He recounted his story to an audience of supporters and reporters at the Hawaii State Capitol July 1, 2004, there for the governor's signing of what has come to be called the "Enhanced 911 Bill." Chong, the primary lobbyist for the bill, had told his story to countless lawmakers and neighborhood board members across the state in an effort to help get the legislation passed. He says more than 1 million calls are made to 911 annually, and half of these calls come from cell phone users, many calling for a third party in distress, making the service all the more vital.
The bill, presented to Chong by the governor after she signed a copy for him, upgrades the technology for the current 911 operative system in the state so Emergency Medical Services can pinpoint where a caller from a cell phone is located. The upgrades are scheduled to be completed two years from now, too late for Chong, who says the enhanced 911 services for wireless phones would have been a great help to him during his bicycle accident.
In her speech at the bill signing, Gov. Linda Lingle says she believes this bill will help everyone in the state, providing a useful and lifesaving service to hikers, anyone lost and visitors. Chong also points out that the bill will also mean less risk for rescue units as they will more easily locate distressed parties.
Previous to July 1, 2004, Hawaii was among only 14 U.S. without this type of locator. Currently in Hawaii, those calling from a cell phone had to describe their exact location. Two years from now, once the technology in the state is upgraded, 911 operators will be able to trace emergency calls of cell phone users. This type of service is currently provided for land phones free of charge.
To pay for the upgrade for the service, the legislation that just passed mandates all cell phone users pay a monthly fee of 66 cents per cell totaling $7.92 a year –— fee that could be increased annually. Government issued cell phones are exempted from the fee.
Many people who supported this legislation feel the annual fee is a reasonable price to pay for the sense of safety that it will ensure.
Others, however, see the downsides this new fee imposes. State Sen. Sam Slom, R-Hawaii Kai, who opposed the passage of the bill in the Hawaii State Legislature this year for a number of reasons, says the money the cell phone companies will be asking for is just an additional fee or tax.
Slom is not against enhancing 911 services, but he believes phone companies should pay for the costs rather than putting yet another charge on customers — a fee that could continue to rise with few safeguards.
He urges wireless phone users to take a look at their current bills to see how much they are already paying. He says some pay as many as $10 to $15 per month in service charges — costing them more in unrelated fees than they pay for the air time for their cell phone usage.
If phone companies are truly concerned with this issue, "they should spend less money on advertising glamorized features and give the service to everybody without an additional fee," Slom says.
But the raising of monthly costs is not the only anticipated problem. The fees for wireless enhanced 911 will bring in about $6 million, while operations will only cost about $2 million. Slom says his biggest objection to the bill is this disparity between the money paid in additional fees by cell phone users and the money used to continue the additional services. He asks what the extra $4 million the state is collecting will be used for and has not received an answer. Although the bill was signed July 1, 2004, the system will not be put into place for at least two years, as it has not yet been decided which of the three kinds of technology will be used to carry out the objectives of the bill.
Critics, including Slom, say the system could not be as important as advocates say or they would rush to put the system in place. Critics also say the fee should not be mandatory for cell phone users, and should not exempt government issued phones.
Christina O'Connor, a junior at Maryknoll Schools, is an intern with HawaiiReporter.com
Finding the Money to Pay Bills
By Lowell L. Kalapa, Tax Foundation of Hawaii
Whether the public employee unions would like to believe it or not, the other shoe has dropped in the debate over whether or not the state, or for that matter the counties, has the money to meet its obligations under the arbitrated contract with the stateís largest public employee union.
In this case the shoe is the announcement that the state = and the counties = will have to come up with a good chunk of change = $93 million for next year alone = to fully fund the employees' retirement system. This shortfall occurred when lawmakers "skimmed" what they thought were the excess profits the system's investments were making during the stock market's hey day. Of course, when the market went south, managers of the system realized that there wouldnít be enough money in the system to meet its future obligations.
And like refinancing the debt discussed a few weeks ago, policy makers were hoping that the market would come back to once more replenish the pot or the economy would improve so much that the tax revenues would come rolling in in the massive amounts needed to meet the shortfall.
However, now that the market has made the correction on what were overpriced equities, it appears that the comeback will be a long time coming. And because lawmakers gave so much away in tax incentives and tax credits, even a recovering economy will not help the state's tax revenue picture for sometime to come.
The result is that both the state and the counties will have to come up with the funds to meet the obligations of the state retirement system. And just where will government find the money to meet this obligation?
What is known is that government just does not have the money and the proof is in the recent track record of both state and county governments. State lawmakers have had to raid special funds for the past eight years in order to balance the budget while county officials have not only resorted to transferring balances from dedicated funds but also imposed new charges for all sorts of government services that used to be underwritten by the real property tax.
All of this financial wizardry of raiding special funds and paying for specific services with user charges and fees has been undertaken to avoid having to raise taxes. Because the money could not be found under some rock, elected officials at both the state and counties have avoided doing the really tough job of deciding what should be priority programs for government. Elected officials have pandered to constituents by funding this or that program while neglecting the core services such as education, prisons, human services, parks and sewers.
As a result, constituents have come to believe that many of these other programs are essential to the community and demand that they be funded all the while complaining that taxes are too high. The truth of the matter is that the taxpayer is his or her own worst enemy because they demand many of the services that government now cannot afford. But that should not let the elected official off the hook.
No indeed, the elected official is there to make the decisions and set the priorities. And elected officials should be held accountable if they cannot set those priorities for what limited taxpayer dollars they have at hand. Because the legislature has failed to set those priorities, taxpayers will more than likely be asked to pay even more in taxes as obligations, such as debt services and funding of the retirement system, come due.
Would elected officials even dare to raise taxes? In the end, lawmakers have always responded to shortfalls when there is no fund to raid with a fee or user charge increase. For example, this year after trying to grapple with the problem of providing emergency medical services for the past five years, lawmakers resorted to an increase in the state motor vehicle registration fee. So it is almost a sure bet that when lawmakers can find no special fund to raid or some user fee to increase, they will be hard pressed to raise taxes.
So is a tax increase inevitable? Well, maybe. If lawmakers can't muster the political will to do the other unmentionable - cut spending - then, yes, a tax increase will have to be in the cards. If government canít operate more efficiently with less people by using technology or a novel approach to providing public services, then yes, taxes will have to be increased.
As for taxpayers, the choice is doing with less public services or paying more for government in higher taxes, fees and user charges.
|
