Municipal governments across the country are feeling the pinch.  Service demand continues to increase while taxes become increasingly unpopular.  Cities across the country are looking for new and creative ways to raise revenues without raising taxes.  The country is moving increasingly toward user fees and away from general revenue funds, which introduces its own problems, but is the direction we are moving nevertheless.

One such example is the so-called Crash Tax.  Basically, if you get in an accident that requires emergency response you end up paying for the call, either personally or through your insurance.  There are 18 or more local governments that have instigated this new taxing system, and its catching on.  With fees anywhere from $100 to $2,000, depending on the severity of the accident, these can raise significant amounts of revenue in larger cities.

But not everyone is welcoming the new practice.  AccidentTax.com, a website operated by the Property Casualty Insurers Association of America, argues fervently against the crash tax.  Not only does the site meticulously chronicle the critical public response to this new idea, but it quotes officials claiming it doesn’t raise the amounts they had hoped.  And it also strongly argues that if this is to catch on, insurance coverage will cost more for everyone. 

But beyond this, I worry that this effort is trying to charge fees for services that are the core of the public good.  There are services the government may or may not provide for its citizens, such as welfare assistance or public housing or even public education.  Most feel these services are important, but are not critical to the functioning of society.  However, first responders are in fact critical to the smooth functioning of our economy and society.  While the promoters of the crash tax assure us that services will be provided whether or not payment could be made, but once we start “taxing” these critical services we open the door.  It seems almost too easy to cross the line and neglect the most important duties of civil service. 

As we move toward the service fee structure of government, we can’t wholly replace taxes.  Certain core services provided by our government are required in order to keep our community, and economy, moving.  The Crash Tax is one step down a dangerous path, and one we might think twice about before taking.