Out-of-towners now need to be more careful when driving in the city of Sacramento.
Sacramento City Council voted 5-4 last Tuesday to implement a “crash tax.” This approved ordinance applies to non-residents who get into automobile accidents within city limits and require services from the fire department.
The crash tax is a one-time fine for every accident caused by non-residents. A person is considered a resident of Sacramento if he or she lives full-time in the city or owns a business in the city.
“The purposes of [the crash tax] is not to secure revenue but rather to recover reasonable costs from persons who have benefited from [services provided by] the city department,” said Sacramento Fire Department (SFD) Chief Ray Jones, during last week’s city council meeting. “It is an effort to maintain the level of services we have.”
Fines for non-residents depend on the services SFD utilizes at the scene. The minimum fine is $435 for fire services to go to the scene of the accident and assess any hazardous damage. If there is a vehicle fire, the fine increases to $680. Non-residents can be billed up to $2,275, if heavy rescue equipment is brought into the scene.
SFD estimates that it will recover $300,000 to $500,000 from the general fund after this ordinance is implemented.
Recovery costs will help save money and keep departments from closing, Jones said.
“With two companies already closed, all options have to be on the table,” said James Butler of SFD. “Imagine the public backlash if a company closed [due to budget constraints] and something happens.”
SFD will be using a third-party vendor to collect from non-residents who are at fault.
“There’s a 17 percent fee for the third-party billing. There’s no cost to the city,” Jones said. The billing agency will be taking portions from the amount recovered in each accident.
As in most accidents, insurance companies will be responsible for determining which party is at fault for the accident. Depending on the circumstances of the accident, the crash tax may not be covered under current insurance policies.
“Our contract is with the customer, so the bill [from the accident] may have language that may or may not be covered,” said Vince Wetzel, public affairs specialist for State Farm Insurance.
“The typical auto insurance policy was never intended to cover these fees,” said Sam Sorich, president of the Association of California Insurance Companies, to the city council. “The typical auto insurance policy pays for injuries and property damage. It does not pay for the fire department’s response to an accident.”
Revenue from the crash tax is unlikely to be realized, Sorich said.
Additionally, as the costs of investigating these claims increase, insurance premiums will increase as well, Wetzel said.
For accidents in which drivers do not have insurance, the fire department will be billed for the costs of their services.
“This ordinance rewards those who don’t have insurance,” Wetzel said. “It almost penalizes you if you do have insurance.”
Sacramento joins 60 other cities and fire districts in California that have implemented a crash tax. The majority of those agencies bill only non-residents for fire recovery costs. Eleven of the agencies, including the Woodland Fire Department, bills both residents and non-residents who are at fault for the accident.
State Senator Tony Strickland is working on SB 49, which would prohibit cities from passing ordinances like the crash tax.
SARAHNI PECSON can be reached at email@example.com.