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'Crash Tax' on 911 Calls Isn't Working Out

By Jason Beahm on March 17, 2011 6:49 AM

What would make a car accident even worse? How about receiving a bill from the fire department, known as a "crash tax?" 

A number of cities have begun instituting such policies for responding to traffic accidents. The taxes are only instituted on out-of-town drivers and only if they are at fault.

Cities in 26 states now have a crash tax, NPR reports.

"Like a lot of cities, we're really struggling here," says John Brown, the city manager of Petaluma, Calif. "All my departments have been trying to find new revenues or cut costs."

FindLaw recently wrote about a similar phenomenon involving clean up fees after a tractor-trailer hauling a load of industrial printer cartridges spilled onto the highway in Boston.

However, it seems that the crash taxes are not working out all that well. Petaluma brought in $14,000 from the crash tax last year. Part of the problem: some insurance companies refuse to pay. "[Th]e typical insurance policy covers injuries and damage to property, and what these fees are is the cost of the fire department to come to the scene of the accident," says Sam Sorich, president of the Association of California Insurance Companies, NPR reports. "It doesn't involve injury, doesn't involve property damage." That means that the tax is typically not covered.

There are other problems. Cities that have a crash tax can obtain a negative reputation, which keeps potential customers from visiting local shops and spending money. "All this is, is a double tax on hard-working Californians who are living paycheck to paycheck right now," says California Republican state Sen. Tony Strickland.

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