Some Tennesseans might not know it, but Republican Gov. Bill Lee shielded them from a sudden rise in phone bills this summer when he vetoed legislation to increase the 911 surcharge.
However, despite that veto and the fact that legislators don’t return to Nashville until next year, Tennesseans still face the threat of a 911 surcharge rate hike inflating their phone bills.
The Tennessee Emergency Communications Board (ECB) held an Aug. 11 hearing to revive and advance the proposal to raise the 911 surcharge from $1.50 to $1.86, a change that would have the state collecting an additional $36 million annually from Tennesseans. However, Rep. Rush Bricken, R-Tullahoma, testified against the tax increase.
“Throwing more money into our current system is not the solution,” Bricken said, adding that state legislators voted this spring to have the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) study the current state of emergency communications funding. “To have any consideration of a rate increase before the TACIR study is premature.”
While numerous county 911 directors told the ECB the surcharge rate needs to be raised in order to fund rising operating costs, Bricken reminded ECB members and hearing attendees that “the surcharge was never intended to fund operations.” Bricken explained that the original intent was for operating costs to “always be funded by local government.” Bricken advised the ECB to “go back to the genesis of the surcharge in the ’80s.”
During the legislative session earlier this year, lawmakers supporting the surcharge hike and claimed it was needed to cover rising operating costs and that the more than $300 million in reserves could only be used for specialized equipment. The initial intention of the surcharge, as Bricken put it to ECB members, was to prevent any surcharge revenue, whether a rate hike or existing reserves, from covering salaries and other operating expenses.
During the Aug. 11 hearing, Bricken was the only person to point out that ECBs are benefiting from growth in surcharge revenue coming from an increase in the number of phone lines. Bricken suggested state officials call the carriers in and get them to explain how they are applying the surcharge and whether they’re collecting all they’re currently owed, which Bricken suspects is not the case, before considering a rate hike. He pointed to Indiana’s or North Carolina’s systems as a blueprint for what needs to be done in Tennessee.
While nearly half of North Carolina’s 911 Board is comprised of those who pay the 911 tax, more than half of Tennessee’s ECB members represent recipients of 911 revenue. The differing board compositions in these neighboring states create contrasting incentive structures, with predictable results. While Tennessee officials are seeking to raise their $1.50 911 surcharge by 24%, North Carolina’s 911 Board recently cut their statewide fee from 70 cents to 55 cents.
It’s probably not a coincidence ECB members chose a slow news month as the time to revive a tax hike that the governor vetoed only weeks ago. The ECB will resume consideration of the proposed 911 surcharge rate hike at its hearing Wednesday.
Patrick Gleason is a senior fellow at the Beacon Center of Tennessee and vice president of state affairs at Americans for Tax Reform, an organization founded in 1985 at the request of President Ronald Reagan.