Dialing for Dollars
Over the past two decades Rhode Island has diverted more than $100 million in fees charged to telephone customers who were told the money was going to the Emergency 911 system. Federal officials say the state is one of the worst offenders in the country and have threatened to withhold federal funding for future 911 upgrades. This week: Jim Hummel sits down with Gov. Raimondo to ask why the state hasn’t taken any action - despite her pledge last year to support reforms. And he checks in with Speaker Nick Mattiello on a bill that would fix the problem.
When the statewide 911 system was created more than three decades ago, Rhode Island authorized phone companies to slap a surcharge on customers’ monthly bills to pay for 911 operations.
The 911 fees were deposited in a special account until the year 2000 - when the General Assembly changed the law and funneled all of the revenue into the state’s General Fund, available to be spent on anything.
This year customers forked over more than $17 million to the state, but 911’s budget was only $6.8 million - less than half the revenue.
Giacomini: “What don’t they understand about the surcharge itself? Why do they assume they can spend it any way they want when they’re being told they’re not allowed to?”
Robin Giacomini is a healthcare professional from North Providence. She is on a mission to have all the money collected actually go to 911 - or to have the state lower the surcharge on consumers. Giacomini has studied the issue for a year, writing the state budget office, legislative leaders and the governor’s office with detailed financial analyses of what Rhode Island is doing with the fees.
She calls the raiding of the 911 fees a deceptive trade practice.
Giacomini: “The state of Rhode Island would not allow Tide (detergent) to label their bottle at 100 ounces and fill it at 45 ounces and sell it to you. That’s exactly what they’re doing. There’s something called the Truth in Billing Act. It’s telling the telecomm you have to tell everybody the truth on where that money is going. The state of Rhode Island isn’t absolved from that responsibility.”
The issue was in the headlines a year ago when Michael O’Rielly, a commissioner with the Federal Communications Commission, visited Rhode Island - which he called one of the three worst diverters of 911 revenue, along with New York and New Jersey.
Giacomini went to what was billed as a 911 summit.
Giacomini: “The FCC commissioner standing there stating to us the state of Rhode Island is literally stealing the money. And I thought at that time it was very odd for the FCC Commissioner to be using those words. And he repeated it.”
But the FCC has little enforcement power. Its only leverage is to withhold federal grants that will help upgrade 911 systems across the country. Rhode Island will be ineligible for that money when it is made available.
Governor Raimondo at the time said she would support legislation to revert to a restricted receipt account - but legislation to do just that never made it out of the legislature.
And instead of creating a restricted account, the General Assembly last session simply changed the name of the tax from 911 to ‘first responder and emergency responder agencies.’ But that message has not gotten through to the phone companies. This is a recent Verizon bill and one from Sprint, still calling it the 911 tax.
So we asked the governor this week about restricting 911 funds. And she again pointed the finger at the General Assembly.
Raimondo: “We could suggest it to them. But as I’ve learned, over and over again, that would be a suggestion. They need to pass a law to make that change. And if they do that, I think it would be a good thing.
Hummel: “You still have more than half going into the General Fund. And there was a big discussion about this a year ago and you had talked about, well if the legislature is going to reform, I’d be behind that. Nothing has changed in the last year.”
Raimondo: “Yeah, so here’s what I think: it is well funded, and as I said, it’s full staffed and people should feel safe. If the legislature were to do a restricted receipt account, then I would favor that, mostly because it’s just more transparent. People ought to know how much is going into the restricted receipt account.”
The governor said she had not seen a bill filed last month filed by Rep. John Lyle of Lincoln that would put 911 fees into a restricted account - or lower the surcharge for customers, which is now $1 a month for landlines and $1.26 a month for cell phones.
Hummel: “The fact is the budget starts with your office, though. You, tomorrow, when they’re putting together the budget, could say ‘look as we’re putting this together’ - on your phone bill it still says 911 tax. The bill you get, the bill I get, all of the bills together. So you talk about transparency, when people look really isn’t reflective of what that surcharge is being used for. Is it?”
Raimondo: “It is - because some of it is, but it would be more transparent if it were in a special account.”
Hummel: “There is a bill here that filed last month that would do just that: restricted receipt account, or lower the surcharge. Would you support this bill?”
Raimondo: “I haven’t seen the bill so I don’t want to speak about that bill you have in front of you. But, as I said, I would support a move to put it in a restricted receipt account.”
Hummel: “The problem is Rhode Island, New York, New Jersey are the biggest diverters of fees. And that rules Rhode Island out then on getting any potential federal money to go to Next Gen, NG 911. And so that reason alone, would you want to stop diverting fees?”
Raimondo: “Yes. In every budget there are choices to be made and the money is being invested in public safety, broadly. So would I support this, yes? What is my top priority? Making sure I have a colonel of the state police, who is managing 911 so we have every staff spot filled, every person is trained, he’s looking into some new advance training, that’s where I’m really focused, running the government.”
Speaker Mattiello, in a statement to the Hummel Report, directly responding to the governor’s comments said:
“If the Governor wanted to create a restricted receipt account, she could have proposed it as part of her budget earlier this year. If she submits an amendment to create such an account, as well as a plan how to fill the budget shortfall it would create, the House Finance Committee will consider it as part of the budget process.”
Manni: “Technology is a huge component of what we’re looking at.”
Col. James Manni, who took over as head of the Rhode Island State Police and Department of Public Safety last month, said he is doing a top-to-bottom review of all departments, with 911 at the top of his list.
He notes that the administration has added more than a million dollars to the 911 budget and increased staffing to help cut down on wait times for those calling with emergencies.
He also plans to revive a 14-member advisory commission established when 911 was created. The commission hasn’t met for seven years, and Manni said he doesn’t know why.
Manni: “It has gone by the wayside, so we will be utilizing that in the very near future, revitalizing that and getting the appropriate membership on that board.”
Hummel: “What do you think that board can do for you?”
Manni: “Well, it’s an advisory board, it would tell us where our deficiencies are and where our strengths are and then we could move forward from there.”
Meanwhile, Giacomini’s efforts to find out more about 911 funding and to urge potential changes has fallen on deaf ears. She has not received a response to her numerous emails to elected and public officials.
She emailed a person in the Office of Management and Budget directly.
Giacomini: “I tried to find out information from him a couple of times, I didn’t get any answer. I’ve tried OMB, that didn’t work.”
Hummel: “You emailed these people directly?”
Hummel: “Do you expect a response to at least say I’m sorry I can’t help you? Or it’s been nothing?”
Giacomini: “It’s been nothing. No response at all.”
Hummel: “What do you think about that?”
Giacomini: “It’s been disheartening.”
The administration says the excess 911 money may be going into the General Fund, but it’s being allocated to the Department of Public Safety.
Hummel: “The FCC gives you the authority to have Sprint, Verizon, T Mobile go in and be a third-party biller, they enable them to do that. They don’t enable you to say I’m going to tax this and then be able to use it in another area. So I understand you’re saying it’s going to public safety, but that’s not what the original federal law was: is that….Some states fund their 911 without any surcharge, they do it right out of their own budget. Rhode Island has chose, long before you were there, to be able to do that. So why not just lower the fee and tell people you’re going to get a break.
Raimondo: “Because we need the money to do important things. I mean that’s like saying: why not lower taxes?”
Hummel: “Well, isn’t that the problem, then? You’re addicted to the money. You can’t cut it off, because….”
Raimondo: “You would say addicted, I would say it’s being invested in public safety, which is keeping Rhode Islanders safe.:
Giacomini: “I can’t find anything that shows that those residual dollars stay under the public safety umbrella. There is nothing that stops those dollars from being used for anything else. Your phone bill, it says ‘911 surchage.’ That’s because it’s a federally-enabled interaction.”
Hummel: “So they can’t go to the FCC and say: let’s make it a public safety service charge.”
Giacomini: No. Because we’d be the only state in the nation that was allowed to do that. They’d be telling you, you could fund your public safety division, you could fund your state police with a surcharge on your phone bill? Our governor, she’s an educated, intellectual individual. Mattiello’s an attorney, he should know this. So is it ignorance or it intentional negligence? If it’s intentional negligence, that’s pretty bad.”
Giacomini says Rhode Island should look to other states to see how they handle 911.
Giacomini: “Massachusetts and Alabama are the two best systems: a dedicated fund, then it goes in it sits in the 911 fund and then there’s an oversight committee of all the integral government bodies. We’re committing a deceptive practice when we don’t use every dollar and account for every dollar, to go to 911.”
Jim Hummel, for The Hummel Report.