No Collect Calls Here

March 9, 2008
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GRAND RAPIDS — It seldom happens. In fact, this may be only the second time it has occurred in the last half-century.

When a tax is created, governmental units are normally exempt from it. But that isn’t the situation following the Kent County Board of Commission’s recent decision to add a 45-cent surcharge to phone bills in order to raise funds for the county’s 911 dispatch authority.

All local governments in the county — cities, townships, villages and even Kent County itself — will be charged the fee starting July 1, just like every business and resident in the county.

Why? Because these governmental units have billable phone lines that are serviced by private companies, and these businesses will add the tax to every bill that goes out, and because Lansing lawmakers didn’t exempt governments from the surcharge when they created Public Act 164 last year, the state law that allowed the county to enact the tax..

“There is no exemption for governments. We pay the surcharge just like any other telephone user because the telephone company is collecting it. They’re not going to be the one to determine who is eligible and not eligible as a taxpayer,” said Robert White, county fiscal services director.

White told the Business Journal the county has about 3,750 phone numbers. There are 2,700 PBX numbers, 600 Centrex numbers for outlying county facilities, and 450 cell numbers.

“My understanding is, that works out to be a surcharge of $189 a month,” he said.

The 45-cent fee is charged to every billable phone up to the first 10; then to every 10th phone. When the surcharge goes into effect, the current state fee on wireless devices will drop from 29 cents to 19 cents, a charge the county pays but doesn’t collect for the local dispatch authority.

“Generally, governments don’t pay taxes to other governmental units. We don’t pay property taxes. We don’t pay income taxes. But I’m not aware of any reduction on telephone lines,” said White.

The surcharge is expected to give the Kent County 911 Dispatch Authority $1.8 million from July through the end of 2008 and $3.6 million for 2009, if the tax is still in effect for all of next year. When legislators approved the fee, they added an expiration date of Feb. 28, 2009, to it, so lawmakers will have to take action on it in a year.

The dispatch authority will use the receipts from the surcharge to consolidate the call-taking function, install new technology in the emergency 911 process, buy a new system that is capable of simultaneous dispatches, and conduct a radio communications study.

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