Dear Missouri Legislator:
On behalf of the members of National Taxpayers Union in Missouri, I am writing to express opposition to HB 714, which would allow a 911 fee of up to $1.50 to be imposed on cell and landline phones and would create a 3 percent tax on all prepaid phones.
Although adequately funding 911 services is important for public safety, it is also important to be mindful of the financial difficulties facing many Missourians. Regressive charges like those proposed in HB 714 place an especially heavy burden on low-income families. On wireless service, Missourians are already paying 14.6 percent of their bills to cover state and local taxes and fees – the seventh-highest rate in the nation. The new tax on prepaid phones would likewise be harmful for customers of modest means, since these devices offer the convenience of a reasonable up-front price without a long-term commitment. Moreover, given the already high tax rate on wireless service, it is difficult for taxpayers to believe that once in place the tax rate would remain at 3 percent for long. In any case – cell or prepaid – wise policy would aim to reduce, not increase the tax load across the board.
Further, NTU is concerned that fees collected for 911 services could be used by governments on unrelated programs and functions. While the current draft does not permit these funds to be spent on non-public safety or emergency response purposes, it should be noted that 17 other states have done so in just the past six years. For instance, New York diverted $20 million of 911 fees to the state General Fund in Fiscal Year 2013-2014. Meanwhile, Rhode Island routed $12.1 million of its $17.5 million in E911 collections to the General Fund, where they were used for other programs.
It would be far too easy, given the ongoing challenges with maintaining fiscal discipline, to tap into new 911 fee proceeds for purposes unrelated to public safety at some future point. This would be unfair to telephone users and taxpayers in general.
Again, NTU urges you to reject HB 714 and its regressive increase in telephone taxes and fees. Thank you for considering the views of taxpayers.
Executive Vice President