Minn. districts consider 'crash tax' for rescues

Nonresidents may be billed as a way to recoup on-the-scene expenses at serious traffic accidents

By Nick Ferraro
St. Paul Pioneer Press

SOUTH St. PAUL, Minn. — It's sometimes referred to as a "crash tax" — and it could be coming to a town near you.

South St. Paul and West St. Paul are considering charging nonresidents such a fee as a way to recoup some of the on-the-scene expense at serious traffic accidents in the cities.

Fridley and Columbia Heights already are taking advantage of a state law that allows cities to impose a "reasonable service charge" for serious crashes, rescues and other emergencies. Minneapolis, St. Paul and Burnsville charge only for removing someone from a crushed vehicle.

"Cities and governments are always looking for more ways to recover costs, and this is something that is authorized by state statute," said Kori Land, city attorney for South St. Paul and West St. Paul.

The fees are usually paid by auto insurance carriers, South Metro Fire Chief John Ehret said. Those without coverage would be billed.

South Metro would charge $577 per call. The proposal also allows the department to charge for water rescues, chemical spills and pipeline breaks; no matter where the person involved lives.

The idea to charge nonresidents, but not residents, for crashes is unique, Land said. The fire board finds it "unpalatable to charge a resident for fire services when they're paying taxes already," she said.

Beyond the court of public opinion, there is a risk in charging differently for residents and nonresidents. Courts in some states have decided it is unconstitutional, Land said.

"They basically have said that it's discrimination," she said.

Although the issue has not been decided by the Minnesota Supreme Court, she said, the U.S. Supreme Court has decided charging unequal fees for fire service impedes the constitutional right to travel.

The fee could bring up other issues, Land said. For in-stance, it hasn't been ironed out what would happen when a resident causes a crash involving a nonresident.

"I don't know that it's fair to make the nonresident's insurance company pay," she said.

On the plus side, she said, state law allows cities to collect the fee by assessing unpaid charges against a person's property, regardless of whether the person is a resident.

St. Paul has charged to extricate motorists from crashes since 2006. Last year, firefighters freed people from 63 cars, bringing the department nearly $33,000.

"Hey, it's a lot work," St. Paul Fire Marshal Steve Zaccard said, adding the department sends two, and sometimes three, vehicles to major accidents.

Last year, Minneapolis collected nearly $129,000 from its fee, which is collected through insurance carriers by a third-party vendor. The fire department had a 2010 budget of nearly $54 million.

The fee has not been well received in some communities.

Andover enacted a fee for serious crashes in January 2008, but it was dropped four months later after complaints from residents and insurance brokers, city administrator Jim Dickinson said.

"It wasn't popular," he said.

Mark Kulda, spokesman for the Insurance Federation of Minnesota, a nonprofit trade association, said all policy-holders ultimately pay for the fee through premiums, which are largely driven by claims' cost.

Kulda said that while it's been called a "crash tax," it more resembles a user fee.

"If you want to make it a user fee," he said, "then make the driver pay it themselves, not their insurance company, because we all end up paying for that one person's issue."

The proposed South Metro fee would raise an estimated $29,000 annually, Ehret said.

It comes less than three months after the department grudgingly entered into a new contract with HealthEast for advanced life-support care and transportation. City officials have estimated the department's annual revenue will drop about $152,000 under the contract.

"(South Metro) is trying to get creative," Land said. "Had they been able to keep all the revenues they had been getting from the ambulance contract then they wouldn't be in this predicament."

West St. Paul City Council members were generally in favor of the ordinance at a work session Monday.

"I understand what we're trying to do here — I think recovering some of the costs makes sense," Mayor John Zanmiller said. But he added, "I do worry that we're going to make these things fee-based rather than tax-based and it's going to get out hand, not now, but farther down the road."

South St. Paul City Council members also debated the issue at a work session Monday night and "ultimately decided that they felt it is appropriate to recover some of the costs," Land said.

Both cities would have to pass identical ordinances in order for it to go into effect; initial readings are expected in April.

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