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The City and County of Denver is procedurally moving forward with a plan that would charge a fee to non-residents of the city when the fire department or other emergency responders are dispatched to any traffic accident on a state highway within the city limits. According to Denver’s 2010 Final Budget Summary, the city projects that by charging such a fee, $1.13 million would be collected in a year.

The City Council has given their initial approval to the fee by passing it as a part of the overall 2010 budget but could still strike the idea, thereby leaving a $1 million hole in projected revenues for the city. Mayor John Hickenlooper’s Deputy Communications Officer, Sabrina D’Agosta, said that the proposed fee is now in the hands of the Denver Fire Department, as that agency will soon put out a request for vendors who could handle the billing and collection of those fees. D’Agosta said it is reasonable to expect the question to come before the City Council sometime this summer, although unforseen circumstances could alter the timeline.

Accident response fees, sometimes called “crash taxes,” have cropped up in recent years as municipalities all across the country have struggled with declining revenues, particularly sales-tax revenues. Also, almost as quickly as those fees have sprung up, several states have moved to ban sub-governments from charging them. In 2008, five states banned accident response fees, and in 2009, three more states followed suit. Just weeks ago, Alabama passed a law prohibiting accident response fees.

Banking on future revenues from these kinds of fees can be a risky proposition as well. As of this publication, only three known governments charge accident response fees in Colorado: Foothills Fire District (in Jefferson County), North Washington Fire District (serving a portion of Adams County), and the South Adams Fire District. Fire Marshall Ron LaPenna with South Adams Fire said that in calendar year 2009 the district gave out a total of 376 invoices, which would have totaled $78,100. However, the district only collected on 140 of those invoices, netting $26,600.

The Foothills Fire District experienced a sharp dropoff in accident response fees from one calendar year to the next. In 2008, Foothills Fire collected $64,515 for accident responses. In 2009, that revenue dropped off by more than half as the district only collected $29,199.

Several news outlets reported in 2009 that the accident response fee was proposed by Denver last fall, but now that the 2010 budget has been approved, the fee would seem more likely to become reality given that it passed as a part of the budget plan.

Last September, the city’s Chief Financial Officer Claude Pumilla defended the idea behind the fees, telling KMGH Channel 7’s Jaclyn Allen, “When you think about non-residents, they’re not paying taxes for the city and county of Denver, and effectively, when emergency medical services are sent out, our own residents, who are paying taxes, are subsidizing that service.”

It is unknown if Mayor Hickenlooper directly supports the idea of accident response fees.

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