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Bill Seeks Cellphone Tax Law Change

External News Source June 20, 2012 Industry

By Jon Harris, NEWS STAFF REPORTER, Buffalo News (New York)

Two state lawmakers recently announced a bill that would change the current tax law on cellphones to ensure that nearly 60 percent of surcharge funds go to counties and local governments for public safety purposes.

State Sen. Mark Grisanti, R-Buffalo, and Assemblyman Dennis Gabryszak, D-Cheektowaga, discussed their proposal during a recent news conference.

In 1991, the state began collecting a surcharge of 70 cents on cellphone bills, and in 2002, the surcharge was raised to $1.20.

Proceeds from the surcharge, according to Grisanti, were designed originally for the State Police and to pay for upgrades to local 911 call centers and other technological improvements.

But that hasn’t happened, the lawmakers said, even in the aftermath of communication breakdowns such as occurred on 9/11 and continue to hamper emergency services in rural areas of the state.

“Oftentimes, when there is a surcharge placed for an intended purpose, the money gets swept out for use in the general fund and not used for the intended purposes,” Gabryszak added.

The lawmakers’ bill would designate 58.3 percent of surcharge funds as grants or reimbursements to counties for the enhancement of 911 call centers and public safety communications technology. The remaining 41.7 percent would be used for State Police purposes.

“We want to make sure that the funding is going to first responders, to our dispatchers, trickling down from the state to the local municipalities to the fire districts. So this way some of the burden is taken off the county government and local municipalities,” Grisanti said.

In 2002, a state audit discovered surcharge funds were being diverted to miscellaneous State Police expenses, instead of the communications upgrades.

The New York State 911 Coordinators Association estimated that the state has collected more than $1.2 billion in surcharges since 1994. Last year, the state collected $190 million but only transferred $9.3 million to county governments.

To Brian Gould, fire chief of the Bellevue Fire Company, the improper diversion of funds is particularly troubling following what happened on 9/11.

“I think we all saw the tragedy in New York City on Sept. 11, and that should have been a wake-up call that we really need to use these funds where they’re meant to be used,” he said. “It just doesn’t seem right that the state can collect taxes for something and then, once they get the money, use it for something else.”

Copyright © 2012 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.

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