http://www.nytimes.com/2009/04/11/business/11fees.html?ref=politics
Cities and local governments, hit hard by the economy, are finding ways to make more money. All sorts of fees are being created and existing fees are being driven up, all in an effort to raise money. It makes sense; just as the people struggle, the government struggles too. But this is crossing the line. Some of the various fees from different parts of the country mentioned in the article are listed below:
-$316 accident response fee
-"fivefold increase in the cost to renew a livestock license"
-raised car registration fees
-raised birth certificate fees
-raised landfill fees
-raised penalty fees for annual dog licenses
-raised fees for AIDS testing
-Personal Favorite: "Washington’s mayor, Adrian M. Fenty, has proposed a 'streetlight
user fee' of $4.25 a month, to be added to electric bills, that would cover the cost of
operating and maintaining the city’s streetlights."
It is understood that governments are running low on cash, but some of these fees are simply awful. Was this country not built on the idea that ridiculous taxes and fees that go to the government are just that...ridiculous? There are two main reasons that the government should not be doing this. Primarily, it is wrong to make the people pay extra money on top of taxes. When people are digging deep in their pockets for some money, it is not the time to implement fees that will catch some off guard and unprepared. At a time when general sentiment is at a scary low, such fees will do nothing but add to the economic problem of these people. It seems obvious, but trying to pull money from people who just do not have it or are not willing to give it up for fear of further economic issues is not what a government should be doing. If I've seen my money in the market cut in half because of the recession, the last thing I need to see is that the government is adding to my problems with a "streetlight user fee" and an "accident response fee." Where are my tax dollars going?
A related reason is the response of the people that the government now has to deal with. If people are asked to pay more without the means, then they are going to be upset. When they are upset, the government is going to hear about it. Instead of unity between people and government, the people will rise up and exacerbate the problems that we are having in this nation. The woman in the article that was charged $316 for the police to come to the scene of her accident has already come forward and maintained she will not pay because she does not think it is fair. Meg Seymour, a town clerk in Londonderry, NH (home of raised dog license penalty fees), "is dreading local reaction." In 2002, when similar fees were raised, the calls were "vicious." How does public outrage possibly benefit a government?
These fees are wrong and insensitive to the people and they create a schism between the people and the government. In a time when unity and optimism are necessary, this is not the right thing to do.
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Cities are now relying on revenues from licensing fees and penalties civil to supplement their ailing funding from the national government. While it is understandable that local governments must find ways to fund themselves when their federal support weakens, there are certainly correct and incorrect ways to go about this. People understand that the economy is very weak and that there is very little funding out there for municipalities; what they don't understand is why cities need to make up for that feeble cash flow by raising licensing price levels and by creating harsher civil fines.
The first mistake made by the cities in this new method of funding is primarily psychological. Cities must fund themselves in order to operate and benefit their citizens. People understand this and see their tax money as contributions to this effort. While most people hate taxes they can still understand their importance at a very basic level: they are pooling their money for the benefit of the community. However, when cities attempt to pool this money further by way of fines and fees people no longer feel that they are helping the community, instead they feel as if the community is taking advantage of them. They are no longer giving part of their income to supplement the government that oversees them; they are instead being nickeled and dimed by the same body to which they give their taxes. It seems unfair to citizens that the body that they pay taxes to can further take their money by raising prices. This form of supplementing funding is self-defeating in that the government loses the support of its own people.
The second consequence of this is a devastating furthering of the effects of the slowing economy on the citizens of the cities. If the thinning paychecks and growing unemployment weren't enough to handle for the ailing residents of our country's large cities then getting taken for a ride by our government should put them over the edge. Especially in times like these, people look to the government for a hand in order to get out of severe financial trouble; the local governments would be failing their people if they greaten the financial burden that their residents must bear in order to carry out their normal activities. Ultimately this method of supplementing funding hurts cities in their relationships with their residents and hurts the confidence that citizens must have in their governments in times such as these.
I commend the original poster and first responder for their eloquent prose and substantial claims, but the fact is that they are missing the point. What the real issue is that, in response to a budget shortage, the government’s response is not the one this it should be: cut spending.
This seems to be the hallmark of the young Presidency: a nation built upon spending. You can be sure that the local governments are influenced by the actions and policies of the President. This time the blue tide that has swept the nation is even imposing regressive taxes, affecting the poor more than the rich. This does not match their words, and it illustrates just how strapped they are for money.
Consider what you might do when you experience a pay cut at your job. Would you continue as though nothing had happened? Or would you stop the extra expenditures that are unnecessary? I wish I could say the latter, but with the credit card balances as high as they are, that is not the case. It should be no surprise, then, that we elect officials with the same economic habits that we have. They are representatives that are supposed to act as we might.
With almost $1 trillion in new taxes over ten years, tax and spend is the pattern (http://blogs.abcnews.com/politicalpunch/2009/02/obamas-budget-a.html). President Obama, often compared to President Kennedy, is different in at least one respect. Kennedy’s belief was “ask not what your country can do for you, but what you can do for your country,” while Obama’s is forget about the giving anything up, your country will take care of it.
I am not suggesting the cut of all programs, especially the necessary ones. What I advocate is elimination of the superfluous expenditures that benefit only a few. Expenditures like lost agricultural subsidies and lost revenues from protectionist measures are unnecessary. The government is taking advantage of an absolute monopoly and should be lambasted for doing so.
Whatever happened to “No taxation without representation?” These capricious and rampant “fees” are merely “taxation without voter approval.” Doesn’t our Constitution provide that “the people” are entitled to, and have the right to approve all taxation? The rampant use of “fees” to supplement voter approved taxation is unethical, and a breach of the rights of the citizens being “taxed.” These unwanted fees are asking for an uprising from the people because if they do not rise up against these unwarranted fees, the American public will be inundated with worthless fees for everything. Taxation without voter approval is not a democracy, its moving toward socialism. A few “fees” is one thing; “rampant fees” are merely excessive taxation by greedy, maybe corrupt bureaucrats and politicians.
A possible solution to issuing unwanted fees on the American public would be to cut legislative salaries, travel funds and/or funding for aids and assistants. These people wanted the office; let them serve for a little less money so they can see how everyday citizens handle living with limited pay.
Also, these unnecessary fees are coming at the completely wrong time – a time in which most people are already suffering financially. These proposed fees are asking for an uprising from the public – in an already desperate time for most. If you look at the types of fees that are being issued, such as “birth certificate fees,” “landfill fees,” and “streetlight fees,” they are all irrational and stupid.
It is understood that the government is running low on cash, but these fees are not the right way to compensate for governmental debt. Most people will probably end up refusing to pay the fees due to feeling that they are completely futile. This is a desperate attempt of the government to try to scrounge up some extra cash to make up for their previous mistakes. It does not follow the United States Constitution and moves toward a socialist government rather than a democratic one. Remember the last immense problem that occurred concerning “taxation without representation?”
After reading the original post, the responses, and the article, I am completely appalled at the way the government is trying to raise money. Why should individuals who might have had to cut back on their own spending have to pay extra fees on top of taxes in order to support their spending? If the economy as a whole is in a recession, then the government should cut their spending just as the American people have had to do.
While it is understandable that the economy is weak and cities need money in order to continue funding community programs and institutions, there are other ways besides unreasonable fees in which communities can raise money. Communities can ask their citizens for donations in order to continue popular programs or keep institutions running throughout the community. If raising more money is not an option, communities should think about cutting their spending. Are communities spending money on unpopular programs or institutions? If so, then the funding for such programs can be cut, leaving more money for the more popular and necessary programs and institutions.
Overall, it is important for communities to think about the economy as a whole and the situations in which their citizens are in when they are planning to raise or create new fees or fines. If citizens of a community are feeling the effects of the recession, then raising fees is not the best way for the community to raise money. The government, both local and national, should keep the interests of their citizens in mind before instituting or raising such fees, and with the economy in a recession at the present moment, it is irresponsible and unnecessary for the government to raise such fees.
Although some people may disagree with the idea that local governments can raise the fees on certain basic town privileges, the towns simply can not operate on smaller incomes. With inflation increasing at a rate of roughly 2-3% per year over the last ten years, some of these fees are grossly undervalued compared to what people paid for them in the past (http://inflationdata.com/inflation/inflation_Rate/historicalinflation.aspx). Towns have been hesitant to raise the prices on some fees for quite some time, and it is unfortunate that the time when towns need money happens to coincide with the economic crisis that has caused so many families to cut back. The fact of the matter is that the towns needs the money generated by these extra fees to operate, and if the funds could not be generated then the towns would have to shut down some programs which are beneficial to all the townspeople.
The extra fees on the basic privileges of living in a town are a perfect way of making money without burdening too many people. If taxes are raised for everyone, then the entire population would complain that they are having difficult economic times and can not afford it. However, with extra fees being added to car registrations and birth certificates, the people who have to pay more are the ones that actually use the services provided by the town. It is unfair to burden the taxpayers who never use the programs provided by the town, when those who take advantage of the services are able to pay for them. Getting your car registered is a privilege, not a right, and the people aho want to drive should be the ones that pay for it.
Although I definitely agree that it isn’t right for the government to raise fees like this, I do see where they are coming from to some extent. From an economic standpoint, these raised fees should increase revenue for the cities, at least in the short run. The demand for such things as birth certificates and annual dog licenses is relatively inelastic. An increase in price will only slightly decrease the quantity demanded, so there should be an increase in revenue. Depending on how much certain fees are being increased, it makes sense that the amount of people who are willing to pay these fees will only go down slightly. Keep in mind that this is only in the short run. States can only expect slight increases in revenues for a limited amount of time. Eventually, people’s willingness to pay will catch up with them. Demand will become more elastic in the long run, meaning a lot less people will demand things requiring these fees. Therefore, these fees should only be in effect for a short amount of time if cities are actually going to use them.
The preferred solution to this would be to keep the fees how they were, but cut spending, as Ross mentioned in his comment. You can only increase revenue so much. Expenses, on the other hand, can be directly targeted and reduced. This easily increases net income, one of the most important numbers to look at when analyzing the financials of a business, or city in this case. Cities are focusing on the top line, not the more important bottom line. The government needs to focus on reducing expenses to increase its income.
Two things that I would like to follow up with. The first is that the comments clearly show that people are unhappy with these fees. As mentioned the cities need to stay away from this "fee vending" for two big reasons. Primarily because it is unfair to the people. In economic hardship you cannot ask people to just give out money that they shouldn't have to give out. It's just not right.
Secondarily, the reaction of the people, as the comments show, is something that the government should fear. We need unity and morale to rise and this is just not the way to do it. It seems that most people agree with this, both on this blog and in the comments responding to the article itself.
The second thing I'd like to disagree with Ross. I understand the argument that these aren't rights, they are privileges. But why isn't it a basic tax payer's right to have accident response? It is a right for a person in the United States that pays taxes to have the police help them in a time of need. It is something that our nation is built on, the way our country is set up. This is a right that we deserve (if we pay taxes to the government), not a privilege. Once some of our basic principles go out the window, we open the door to some most lost rights.
And even if you think that these are privileges, government fees are like airline fees. True, checked bags and government fees can be paid, but we never feel like we should have to pay them. Since we devote so much to the airline and the government already, they should take it easy on us and give a little back. There doesn't have to be any more to the argument than that. As I concluded the last post, it just isn't the right thing to do.
I completely agree with the idea that unwanted, rampant use of fees is just asking for an uprising from the people; taxation without the people’s approval is indeed a major turn away from democracy. To come home with a bill stating that you have to pay hundreds of dollars for the response to an accident is absurd and unjust. The only reasoning that I can come up with for how a fee for responding to an accident would be somewhat worthwhile would be that it could lead to more caution on the road (but even that is stretching it, and almost not even worth mentioning). But isn’t that the point? There are no valid reasons why such fees and taxes are even worthwhile to the people in these cities – they should not have to pay.
These “fees” are just taxes by another name; a “Streetlight User Fee,” which I agree, is almost comical, is just like a toll for a toll road, and we already are obliged to pay for those. These cities are, of course, responding to these recession-induced shortfalls, but this is disappointing as a democratic country to see such taxation of the people without their consent, or even knowledge of what they have to pay for. This is a pathetic and seemingly not very thought-out plan to gather some extra cash; this new plan will not work out. People are already infuriated with this new implementation, and refusing to pay, for which I don’t blame them.
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