Cost Accounting in Local Government

What do I want to pay for? That is the Question

There is a favorite game being played today called “Catch the Fee that’s Really a Tax.” This game is played by many well-intentioned individuals who believe that fees are being adopted that are “fees” in name only.

If we assume for the sake of argument that the “fee” which is alleged to be a tax meets the requirements of not exceeding the cost of the associated service (which is a criteria for fees in many jurisdictions), then we have a “fee” which could logically be considered either a fee or a tax.

My contention is that the discussion of whether “it” is a tax or a fee is the wrong approach. Rather, we should be discussing whether the service being offered is one that we want to pay for. If it is truly a “fee” for a service, then we ought to be able to opt out of the service. If we cannot opt out, then the question becomes, is there a societal reason that we should not be able to opt out.

This last question is interesting because it gets to the heart of tax services disguised as fees. The classic example is the court fees added to traffic fines. Using Orange County California which is predominately Republican and should be the least tax abusive, a traffic fine of $35 has penalty assessments of $112, a 20% State surcharge of $7, a court operations fee of $40, a conviction assessment fee of $35, an emergency Medical Air Transport fee of $3.92, a Night Court fee of $1 and a Prior Administration fee of $10 for a grand total of $248. The $112 of “penalty assessments” include $2.40 for the Trial Court Improvement Fund, $27.44 for the State Penalty Fund, $39.20 for the County Penalty Fund, $19.60 for the state court facilities construction fund, a second $19.60 for the DNA Identification Fund and $7.84 for County Emergency Medical Services. All this information is available on the Court website along with Government Code, Penal Code and Vehicle Code references for each of the amounts.

The California Courts have been comfortable striking down municipal assessments and fees that did not meet the “fee” test. However, to expect the courts to strike down any of these “fees” would be like asking the ox to gore itself.

However, even if I question whether some of the above amounts are truly fees, I feel that we may be asking the wrong question. I propose that the question should instead be “How much of the courts do I want to finance from my taxes for the societal benefit?” The corollary becomes “The balance of court costs must be borne by the court users.” Therefore, the machinations that the State went through to create all of these “fees” was a waste of time, in my opinion, with the only real effect being to retain the monies for the State and Courts rather than increasing the share due to municipalities.

Since the nexus between the traffic offender and some of the “fees” is truly tenuous, I propose that instead of focusing on the “fees,” we focus on how much of our tax dollars are being spent for the courts and for other tax services. This refocusing frees us to criticize legislative bodies when they are using our tax dollars for purposes or in amounts with which we don’t agree. Then, we can vote with our feet on any service which governments may call a fee and where we can exercise our ability to “opt out.”

More Information about Fee Services

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