Governor to announce firefighting insurance Fee(Tax)

Gov. Arnold Schwarzenegger

SACRAMENTO (CAL FIRE NEWS) – Seeking to bolster California's firefighting defenses, Gov. Arnold Schwarzenegger tomorrow will propose a surcharge(Insert Fee, Tax) of roughly $10 per year(?) on property insurance premiums to pay for increased firefighting capacity to battle wild land fires more aggressively.

The governor's plan calling this a new "Fee" (Tax) would raise over $125 million a year through a 1.25 percent surcharge on annual homeowner, Plan calls for 1.25% levy on all residential and commercial property, business policies that cover fire, flood, theft and other losses.

This $125 million a year "Fee" (Hidden tax) buys the Governor:

• Four firefighters rather than three on each engine year-round
  (Already implemented through an emergency order but not as part of law in Fire prone areas.)
• 100 new engines for local fire departments.
  (More green fire engines...OES rigs?)
• 11 new “all-weather, 24-hour capable” helicopters that are 40% faster than those in the current fleet.
  (New models have a 485-mile range compared to the current 250 miles.)
• National Guard 4 hour response versus current 24-hour notification policy, He also proposes adding to the guards aerial defenses by Providing the Guard with two full-time helicopter crews and firefighting systems for two C-130 cargo planes and three helicopters..
  (Why does this cost much? Seems a policy change is all that is needed, Governor could smoke a Cuban with one of his NG Generals in his private Capitol atrium and deal is done)
  
• The money would be earmarked to fully implement some of the most pressing but still-unfulfilled recommendations coming out of a "Blue ribbon" commission that explored flaws in the state's response to the 2003 wildfires.
  Also, some of the governor's proposals are expected to enact recommendations that will be advanced later this month by a task force reviewing lessons learned from last October's wildfires.
• Put Global Positioning Systems(TomTom $150 each?) on firefighting equipment to help response and dispatch coordination.
• Increased enforcement of state building codes regarding use of fire-safe material and construction requirements.
• Provides $2 million for Reverse 911 systems similar to the one in San Diego for counties that do not have it.
• Use $2 million in federal funds to implement a statewide warning system.

“While California's wildland firefighting capability is already the nation's strongest, the state has a responsibility to aggressively prepare for the next, inevitable round of wildfires,” according to a draft budget document obtained by Copley News Service.

“It provides us a surge capacity across the state,” said Sheldon Gilbert, chief of the Alameda County Fire Department and president of the California Fire Chiefs Association, who helped shape the proposal.

The average small-business and homeowner policy will increase by about $10 a year, or 83 cents a month, administration officials said.(Sure it will...Wanna take bets that this is on the low side?)

“It is fair and equitable. Everyone pays. Everyone benefits,” Dan Dunmoyer, the governor's deputy chief of staff, said.

Dunmoyer, who represented insurers in the Capitol before joining the governor's team, said the average homeowner or small-business policy runs about $900 to $1,000 a year. Insurance industry representatives denied that they were involved in drafting the plan for the 1.25% surcharge.

They said they learned about it at a meeting of insurance company executives in the governor's office in mid-December. Under the governor's plan, insurers would collect the surcharge from consumers and distribute it to the state.

The charge would be added to an existing 2.35% premium tax on property insurance policies. That tax, which is not earmarked for any particular program, generated $216 million for the state budget in 2006, according to the Department of Insurance.

"A surcharge is better than previous attempts to impose parcel taxes on those living in regions protected by state firefighters", he said.
Collecting that tax was complicated by difficulties in confirming who should pay, and it became entangled in litigation during previous attempts, Dunmoyer said.

Foes say it is a tax that calls for new charges to be tacked onto the insurance bill for every residential and commercial property in the state. Administration officials call the charges fees and defend them as consistent with the governor's pledge, repeated in his State of the State address Tuesday, to not raise taxes.
Money in the states general fund already earmarked for fire could be freed up giving the Governor some wiggle room in upcoming 2008 budget.
Administration officials acknowledged that some of the money raised could be used to balance the budget.
They declined to be precise about how much.
"I don't know how you avoid calling it a tax," Lew Uhler, president of the National Tax Limitation Committee, said of the assessment. "The ability of government officials to figure out new ways to tax us is limitless, no matter what their nomenclature."

The implementation of a "Fee" versus a "Tax" would be an end run around implementing a "Official Tax" for Republican Governor Schwarzenegger, Who believes this is California's best chance to immediately improve firefighting capabilities in a tight budget year. The state is staring at a budget shortfall of over 14 billion dollars.
A few months ago, Schwarzenegger increased California drivers' registration by up to $11 to establish a research fund for alternative fuel development.
Others said the plan would not necessarily lead to enhanced fire protection.
The net gain in Firefighting response would probably be much less than touted.

As the money came in, the governor could cut existing funds from firefighting agencies and use it to help close a budget gap that his office projects at $14 billion, said one consumer advocate, who asked why the burden would fall on property owners instead of insurance companies.

"If the governor wants to fill the budget gap, he should find an honest way to do it," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights. "He's wrong to target insurance customers, whose premiums are already too high."

Sources: SoSD, LA Times