LAO 2003-04 Budget Analysis: General Government

Legislative Analyst's Office

Analysis of the 2003-04 Budget Bill

State Emergency Telephone Number Account

The administration proposes to increase the maximum 911 surcharge rate from 0.75 percent to 1 percent of intrastate phone charges. The administration estimates an additional $50 million would result from the increase and proposes to reimburse state agencies for a number of activities. Since the proposal is inconsistent with current law and changes the nature of the 911 surcharge, we recommend the Legislature reject the proposal.

The budget proposes to shift $47 million in funding for various state activities from the Motor Vehicle Account (MVA) and the General Fund to the State Emergency Telephone Number Account (911). The 911 account is funded through a surcharge that is placed on monthly phone bills.


Current Law Specifies Activities to Be Funded. Revenue and Taxation Code Section 41136 allows government agencies and telephone companies to be reimbursed for equipment and related costs associated with California's 911 phone system. Specifically, as summarized in Figure 1 (see next page), the entities receiving 911 funding are:

Figure 1

State Emergency Telephone Number (911) Account Current- and Budget-Year Activities and Costs

(In Millions)



Estimated 2002-03

Proposed 2003-04

Authorized State Operation Activities

Department of General Services (DGS)

· Process claims submitted by PSAPs and telephone companies.

· Estimate and propose annual surcharge rate.



Board of Equalization

· Pay DGS-approved claims.

· Approve surcharge rate.



State pro rata

· General state administrative costs.



Authorized Local Assistance Activities

Telephone companies

· Maintain 911 database.

· Maintain 911 network.



Public Safety Answering Points (PSAPs)

· Install and maintain 911 systems.

· Train staff and coordinate county activities.



California Highway Patrol (CHP)

· Answer cellular 911 calls.

· Transfer non-state-highway calls to closest PSAP.



Proposed Activities


· Fund CHP personnel costs for response to 911 calls.


Department of Health Services, Poison Control Centers (PCCs)

· Fund a portion of PCCs’ annual budget.


California Department of Forestry and Fire Protection

· Install computer aided dispatch systems in 12 emergency command centers.






Wireless 911 Service Is Being Piloted. In order to install new technology to route cellular calls to the closest PSAP, the Legislature increased DGS' expenditure authority in 2001-02 by $32 million to begin the implementation of wireless 911 service. One of the project's benefits is to reduce the number of cellular calls answered by CHP. The DGS has completed a pilot in San Francisco and estimates that wireless 911 should be statewide within the next few years.

Administration Proposes Additional Activities for Funding

It is our understanding that the administration will propose legislation to increase the maximum 911 surcharge rate from 0.75 percent to 1 percent of intrastate phone charges. This increase is estimated to provide $50 million to fund additional state activities, which we discuss be low and illustrate in Figure 1. Since the rate change would not be effective until November 2003, the new revenues would provide a full-year increase of $67 million in 2004-05.

Proposed Activities Do Not Relate to 911 Telephone Systems

We have several concerns with the administration's proposal, discussed in detail below.

Proposed Activities Are Inconsistent With Current Law. The purpose of the 911 Account is to pay the equipment-related expenses of the 911 telephone system. Current law specifies the particular 911 system activities eligible for funding. The administration's proposal, however, does not tie to any of those eligible activities. For example, current law specifies that PSAPs may be reimbursed to upgrade or replace their 911 equipment, not their officers' response to the 911 calls. The administration, however, proposes that CHP be reimbursed for its response to 911 calls. While the administration could propose trailer bill language to allow the funding of these activities, the proposed activities are inconsistent with the broad intent of current law, which is to provide funding to maintain the 911 system.

Proposed Activities Do Not Relate to Telephone Use. Surcharges or fees should have a direct relationship with the particular services provided. Under current law, telephone users pay 911 surcharges to support the operation of the 911 telephone system. In contrast, the proposed activities would pay for expenses state agencies incur as a result of 911 phone calls. For example, the administration proposes to fund CDFFP's continued implementation of its CAD project because the CAD system takes information from the 911 system and uses it to manage CDFFP's activities.

Proposal Does Not Treat State and Locals in Similar Manner. California's 911 PSAPs are made up of both state and local agencies. Under current law, PSAPs—regardless of the level of government—may receive reimbursements for the same activities. In our view, equal treatment is reasonable since all responders perform the same activities when maintaining and operating the 911 system. 

The administration, however, proposes to change that equal treatment in several ways:

If current law is changed to allow these additional activities, the change should treat equally all PSAPs.

No Workload Data to Justify Increases for CHP Dispatchers. The CHP answers most cellular 911 calls, for which it currently receives $4 million for staff costs. This annual cost is based on answering 8 million cellular calls. The administration proposes to increase this amount by $9 million but has not submitted any workload data to support the proposed increase.

Recommend Rejecting Proposal. Since the proposal is inconsistent with the intent of current law and changes the nature of the 911 surcharge, we recommend the Legislature reject the administration's proposal. The fiscal effect of this action would fall primarily on the MVA. Please see the "Transportation" chapter of this Analysis for a discussion of how the Legislature could address the account's condition.

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