8/20/2012 2:15 PM ET|
Governments getting more fee-happy
Strapped cities and states are finding creative ways to assess charges on residents for all kinds of things. Be prepared to start paying your government more in fees.
Raising taxes raises taxpayer ire, which is why strapped governments are turning to fees to raise money. In their enthusiasm, though, governments are blurring the line between taxes and fees.
Taxes are generally broad-based levies that don't necessarily provide an individual benefit. (Let's hope you never need the firefighters paid for by your taxes, for example.)
Fees, on the other hand, typically have been more targeted and are usually levied on someone enjoying some type of benefit. If you want to experience the great outdoors, for example, you might have to pay a park entrance fee.
Once upon a time, those fees might have been earmarked to pay for rangers, restroom maintenance and other amenities. But governments have discovered they can slap fees just about everywhere and use the money just about anywhere.
There are even fees to pay fees. Many agencies now take credit card payments, but often people have to pay a 2% to 3% processing fee to use plastic.
Here are some others, culled in part from the National Conference of State Legislatures' database of state measures to close recent budget gaps.
Fees on fun
Recreation is a great way to relieve the stress of a bad economy. But leisure activities are also juicy targets for lawmakers bent on raising revenue.
Several states have raised fees for hunting and fishing licenses, boat permits, camping and access to parks. Here's just a sample:
- Rhode Island has boosted daily parking fees at state beaches from $7 to $15 for residents and from $14 to $25 for nonresidents.
- Connecticut has doubled the entrance fee at state parks (at many parks, it's now $9 on weekends for residents and $15 for nonresidents) and the fee for an inland-fishing license (it's now $40). The saltwater-fishing license, which used to be free, now costs $30.
- Idaho has raised fees on out-of-state hunters and anglers. A nonresident combination hunting and fishing license costs $235, up from $198, while a nonresident elk tag costs $415, up from $371. Idaho has created a fee for recreational boaters, ranging from $5 to $20, to pay for boat-washing stations designed to stop the spread of invasive mussels.
- New Hampshire also has added a fee: an annual boating license that costs $15 per person, or $150 for party boats.
- In Oregon, boats longer than 10 feet now require a $5 annual permit. Day-use fees at state parks have been increased from $3 to $5.
- Virginia has raised the cost of more than 40 types of hunting, fishing and trapping licenses. Basic hunting and fishing licenses have risen $5 apiece to $23, while permits for nonresidents have leapt as much as $50. For nonresidents, hunting licenses now cost $110 (or $550 for a lifetime pass).
How to cope: Don't skip required permits or licenses; the fines are usually far higher if you're caught. You may qualify for discounts if you're disabled and/or a senior. Also, some states offer lifetime licenses and permits, which can be a good deal if you plan to remain a resident for more than a few years.
To save on park entrance and camping fees, check for discount offers at the state parks' websites. Some state parks have affiliated foundations that offer entrance passes and discounted camping fees as membership benefits. The California State Parks Foundation, for example, offers seven day-use passes in exchange for an annual $25 membership fee.
Fees on criminals
Only felons actually lose their right to vote, but lawmakers in many states clearly aren't worried about generating a backlash from the criminal element by imposing new fees on convicts. Here are a few:
- Virginia has introduced a $10 fee on anyone convicted of Internet crimes against children. Chillingly, the state expects to collect $2 million from this fee in fiscal 2011.
- Idaho has increased court fees so that those convicted of infractions pay $10 more, those convicted of misdemeanors pay $50 more and felons pay an additional $100.
- Arizona has increased probation surcharges from $10 to $20, while one-time fees for those requiring intensive probation have risen from $50 to $75.
- Louisiana has instituted a $65 one-time fee for probation and parole processing.
- Texas now has a $34 fee for those placed on community supervision.
How to cope: Sorry, no advice to offer here, other than "Don't do the crime if you can't do the time -- and can't pay the fee."
Fees on cellphones
Wireless carriers have long been notorious for pretending that the fees they charge are actually taxes. In a case of life imitating artifice, governments are now larding your cellphone bills with taxes disguised as fees.
A study by the Tax Foundation found that typical U.S. wireless consumers pay government-ordered taxes and fees that total 16.3% of their bills. State and local charges alone average 11.2% of typical bills. The tax rate exceeds 20% in Illinois, Florida, Nebraska, New York and Washington state.
Here are just a few examples:
- Baltimore imposes a $4-per-line monthly tax on wireless users, while nearby Montgomery County, Md., collects $3.50 per line.
- Louisiana has imposed a 2% "911" fee on prepaid wireless phones since 2010.
- New York state recently enacted a $1.25-a-month "public safety communications surcharge" for every cellphone.
- In Nebraska and Kansas, Universal Service Fund charges -- which amount to less than 1% in other states -- exceed 4%.
How to cope: Government fees and taxes are based on the user's place of "primary use" -- which is typically determined by the address where the bill is sent. You may get a break if you are willing to lie about where you live and arrange for electronic billing (as this Forbes writer did). States' cell tax rates range from 23.7% in Nebraska to 6.9% in Oregon.
Fees at courthouses
Expect any brush with the courts to cost you more these days, even if you're just recording a document, getting a copy of a birth certificate or selling a home. And if imposing higher fees wasn't enough, some state governments have added surcharges to those fees for good measure.
Some examples of pesky court fees:
- Hitting the "delete" button now costs more: Rhode Island has instituted a $100 charge in 2010 for court orders that grant the expunging of records.
- Utah has raised fees for filing court petitions, which generated an estimated $9.3 million this year.
- Washington state and Oregon have imposed surcharges on court fees, and Washington has increased its document-recording surcharge. Washington will reap more than $14 million a year from the new fees and surcharges, while Oregon will take in an additional $19 million a year.
- North Carolina has boosted a variety of court fees, and its revenue, by $51 million a year.
- Virginia has raised its deed-recording fee by $10, generating an additional $9 million in the state's just-ended fiscal year.
How to cope: If you have a low income and have to do business with the court system, ask if there's a program that waives or lowers fees in hardship situations.
Fees on cars
State legislatures have been raising gas taxes to bridge their budget gaps, but they've really gone to town on raising car and driver fees. Several states have boosted costs for registration, permits and license plates.
Here's a sample of fees on cars:
- New York state now requires people to buy new plates when they register a car, and the cost of plates has risen from $15 to $25. Basic license and registration fees have increased 25%, with the cost of a basic driver's license going from $50 to $62.50.
- New Hampshire has doubled the registration fee for light cars and trucks, and raised registration fees by $30 for all other vehicles.
- Florida has raised new car-registration fees from $100 to $225 and boosted vehicle license fees and various other fees by 35%.
- Georgia has added a $10 motor vehicle registration fee and increased fines for people caught driving faster than 85 mph.
- Illinois has raised title fees from $65 to $105, boosted driver's license fees and increased the vehicle transfer fee from $15 to $30.
How to cope: Avoiding these fees is tough, but you can avoid adding to your pain by making sure you renew your registration and license on time. Renewing late can significantly add to your costs. If your state bases registration fees in part on your vehicle's value, that could be a reason to hang on to your current car longer and consider buying used, rather than new, the next time around.
Fees on tourists
A typical hotel or car rental bill will be larded with "tourism" taxes and fees that pay for amenities you may never enjoy, such as a stadium or convention center or future improvements to the city's infrastructure.
Again, the difference between taxes and fees is blurred, as the "taxes" target a defined group receiving a benefit (tourists buying a hotel room or renting a car), while the "fees" often pay for things that don't benefit the person paying.
Rent a car in Seattle, for example, and, in addition to the state car rental tax of 5.9%, you'll pay a 1% sports facility tax, a 60-cent fee to help pay for the Seattle Mariners' stadium and a 24-cent regional-transit tax.
Book a hotel room in New York City, meanwhile, and you'll pay an 8.9% state room tax, a 5.9% "room occupancy" tax, a $2 city tax and a $1.50 "fee tax" to help pay for the Jacob K. Javits Convention Center.
And governments continue to try to squeeze more from visitors. Colorado, Maine, Nevada and New York have raised rental car taxes, while Hawaii and Nevada recently raised hotel taxes. In addition:
- Hawaii has raised rental car surcharges and diverts some of the money into the state's general fund.
- Nevada has raised car rental fees in a move expected to generate $13 million annually.
How to cope: Never book a car or hotel room based solely on the per-day rate. With rental cars, especially, the taxes and fees can double the cost. Make sure you're seeing all the added fees and taxes before you commit.
Also, consider traveling to places that don't gouge tourists. A recent study by the Global Business Travel Association Foundation found that a traveler to Chicago, which has the highest tourist taxes, pays an average 80% more in taxes and fees than one who goes to Fort Lauderdale, Fla., which has the lowest of the 50 cities studied. Other cities with high tourist taxes include New York, Seattle, Boston and Kansas City, Mo.
Rounding out the low-tax list: Fort Myers and West Palm Beach, Fla.; Detroit; and Portland, Ore.
Fees to snoop
Governments keep vast databases of information about you, but getting a peek will cost you more in many places, whether you're trying to get information about yourself or doing a background check on someone else.
- New Hampshire has raised the cost of a copy of a driving record to $15.
- Ohio has increased fees for vital-statistics requests, which include copies of birth, death and marriage certificates.
- Colorado has implemented a $10.50 fee for background checks for individuals applying for concealed-carry weapon permits.
- Washington state has raised its background-check fee on handgun purchases from $8 to $13.
How to cope: Keep vital records, such as birth, death and marriage certificates, in a secure place, such as a home safe or a safe deposit box, so you won't need to order replacements.
Fees to work
Many unemployment agencies now load benefits onto fee-laden prepaid cards -- a sort of a tax on jobless folks that benefits the card issuers rather than the states.
If, on the other hand, you have a job and need a license or permit to practice it, expect to pay more. Several states have raised their fees on a variety of professionals.
- Connecticut has increased license fees for certified public accountants from $75 to $150 per year and for gas station owners from $50 to $100 per pump per year. The state also has increased license fees for state marshals overseeing evictions, pharmacists, hypnotists, cigarette dealers, liquor stores, bait dealers, land surveyors, attorneys, electricians, plumbers, barbers, teachers and veterinarians.
- New York state has raised a slew of occupational fees, imposed a fee on tax preparers and increased the biennial registration fees for practicing lawyers by $25. The state also has adopted an additional fee for individuals taking the bar exam if they studied outside the U.S. The cost is now $750, up from $250.
How to cope: State governments know they've got you where you live. If you want to work, you have to pay. You might let your lawmakers know how you feel about their balancing their budgets this way, however.
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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