Policy Documents

Accident Response Fees: Say “No” to double taxation and higher insurance premiums

January 26, 2010

In municipalities throughout the United States, police and fire protection and emergency medical response services are provided by local governments or volunteer organizations. Through a wide variety of programs, these services are dedicated to assisting communities and safeguarding the quality of people’s lives. Jurisdictions vary with respect to the funding of these services – general property taxes, local income taxes and general sales taxes are typically used to fund most local services, but transient taxes and other taxes earmarked specifically for services may also be levied. Other existing funding mechanisms include borrowing, leasing, benefit assessment charges, sales of assets and services, and cost sharing and consolidation.

On average from 2002 to 2006, there have been more than 12.4 million traffic accidents on America’s streets each year. When motor vehicle accidents occur, police are almost always called to the crash scene in order to investigate the situation, gather the necessary information and issue any citations. For most crashes, only very routine traffic control and the filing of an accident report are necessary. Some traffic accidents can also require the use of firefighters and emergency medical services (e.g., paramedics and ambulance transit) to tend to the medical needs of injured victims and prevent further injuries and damage. In addition to property and local income taxes that help pay for these first-responder services, fees are currently attached to motor vehicle registrations, traffic citations and other vehicle-related programs.

Over the last few years, “accident response fees” have been introduced as another means to help finance routine police and fire runs to auto accident scenes, whether someone is injured or not. In light of the struggling economy, these fees have developed as a result of mounting pressures placed on local governments to keep their budgets balanced without having to formally increase taxes. Part of their impetus stems from certain third-party collection agencies that have encouraged jurisdictions to implement charge-back programs whenever police or fire departments are called to duty. These fees – also known as “rescue fees” or “cost recovery programs” or by critics as “crash taxes” – are expected to be paid by those who cause auto accidents, either directly or through their insurance companies.