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June 8, 2012

Surcharge change to generate $63M for 911 centers

Maureen Hayden CNHI Statehouse Bureau

INDIANAPOLIS — Of all the items on your cell phone or landline bill, you may not have noticed the little surcharge tacked on to pay for 911 services.

But on July 1, that little surcharge is set to change, as part of a larger effort to stabilize the wobbly source of funding for emergency dispatch services.

Depending on where you live, the surcharge on your landline bill could go up or down by a dollar or two. For contract cell phones users across the state, it’s set to go from 50 cents to 90 cents. Prepaid cellphone users will pay 50 cents each time minutes are added.

It may sound like nickel-and-dime stuff. But it should add up to about $63 million in revenues for the 911 emergency dispatch centers around the state.

The change comes from a new law, effective July 1, that puts the state in control of collecting and distributing the 911 fees paid by telephone users.

Until now, Indiana has had a fractured system of funding: For more than 30 years, counties have set their own surcharge rates on landlines to fund their emergency dispatch centers. The monthly rates now vary from county to county, from 32 cents to $3.

The problem, though, is that over the last decade, more than one million Hoosiers have dropped their landlines to switch to cell phones.

That has cost counties millions of dollars in revenues — some much more than others — and it’s forced some counties to patch the fiscal holes with dollars from their general funds.

“There’s been a massive shift in the technology,  but we still have an antiquated system of collecting the revenue,” said state Rep. Mike Karickhoff, a Kokomo Republican who’s been working on the 911 funding issue.

Andrew Berger, legislative director for the Association of Indiana Counties,  said making the 911 tax on landlines more uniform while also raising the 911 fee on cell phones should provide a temporary fix.

“We were just bleeding dollars,” said Berger. “This stops that bleeding, but it doesn’t solve the longterm problem.”

The Indiana General Assembly didn’t think so either. The new law that gives control to the state over the 911 funding will expire in 2015. But Karickhoff said it gives local and state officials some breathing room to figure out how to change the revenue stream.

The new law plays catch-up with the technology shift going on nationwide as people untie themselves from their wired phone lines.

From 1990 to 2000, the number of cellphone subscribers in the U.S. grew from 5.2 million to 100 million, according to the Federal Communications Commission. By 2010, the the number of cell phone users nearly tripled to 286 million.

In Indiana, as people replaced their landlines with cellphones, counties increased their 911 surcharge rates just to keep up. By law, Indiana’s  big urban counties were able to add a 10 percent charge; small rural counties could charge up to 3 percent.

That system — in which each county sets a surcharge — will be done away with under the new law. The law also sets up a new state board to distribute the money to counties. That board has the authority to raise the surcharge fees by 10 cents every year with State Budget Committee approval.



Maureen Hayden is the Indiana Statehouse bureau chief for CNHI, the parent company of the Tribune-Star. She can be reached at maureen.hayden@indianamediagroup.com.

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