July 13, 2017
On July 1, 2017, both chambers of the Illinois General Assembly voted to override the Governor’s veto of House Bill 1811, which included a measure authorizing the City of Chicago to increase its emergency communications surcharge to $5.00 per month for phone service contracts. The current surcharge is $3.90 per month per phone service contract.
If the City Council approves the emergency communications surcharge increase, Mayor Rahm Emanuel reportedly would use the revenue to fund improvements to the city’s 911 service operations. Additional revenue from the increase would in effect free up funds in the Corporate Fund that otherwise would have been used for emergency communications operations, which could then be used for other purposes. The Mayor has not said how any freed-up Corporate Fund dollars might be used.
State law governs the rate local governments can impose on telecommunication subscribers for 911 surcharges, and any changes require legislation to be passed by the Illinois General Assembly and the Governor. During the spring legislative session, the Illinois House and Senate both approved a statewide telecommunications bill, House Bill 1811, which included an amendment to the Emergency Telephone System Act allowing municipalities with a population over 500,000 to impose a monthly 911 surcharge of up to $5.00 from January 1, 2018 and until December 31, 2020. As the only city in Illinois with a population over 500,000, this would enable the City of Chicago to increase its emergency communications surcharge on phone services from the current $3.90 per month to $5.00 per month. The bill would also allow an increase in the 911 surcharge for all other municipalities in Illinois from 87 cents to $1.50 starting on January 1, 2018.
House Bill 1811 was vetoed by the Governor, but overridden by both the House and Senate on July 1, 2017, becoming Public Act 100-0020.
In order for the $5.00 emergency call surcharge to take effect, the City Council will need to adopt an ordinance authorizing the higher rate. The City Council approved a continuation of the 9.0% emergency call surcharge on prepaid wireless phones on June 28, 2017. The prepaid charge was already 9.0%, but would have expired on July 1 without a continuation approved by the City Council.
According to the telecommunications legislation, the 911 surcharge cap for municipalities with a population over 500,000 will decrease to $2.50 as of January 1, 2021. Presumably, the City would need to work with the General Assembly to reauthorize the emergency communications surcharge.
The table below shows the various rate changes that have occurred since 2008. The most recent increase to the emergency communications surcharge took place in 2014. On July 30, 2014, the Chicago City Council approved an increase in the emergency communications surcharge paid by subscribers of landline or wireless services from $2.50 to $3.90 per phone service contract, and the surcharge paid by purchasers of prepaid phone services from 7.0% to 9.0%. Prior to that in 2012, state law changed the surcharge on prepaid phone services from a flat fee of $2.50 to a rate of 7.0%.
The last increase in the 911 surcharge in 2014 was intended to help shore up the Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund by freeing up emergency communications funds for their intended purpose, to operate the City’s 911 emergency services. Previously, the City used general revenue funds to subsidize 911 operations because of a shortfall in 911 surcharge revenues. This in effect reduced available general funds that otherwise could have been spent on operational needs. Last year, the Mayor earmarked revenue from the 2014 increase in the 911 surcharge for the Laborers’ Fund.
The Civic Federation will continue to monitor the City Council’s actions on the 911 surcharge.
Helpful Links:
Chicago Tribune: Emanuel’s latest possible tax hike: 911 phone fees