Dialing for Dollars
By A.D. Freudenheim

24 August 2003

I heard mention a few weeks ago of an audit, done by New York State’s Comptroller, that found that millions of dollars collected from cell phone customers by New York, and disbursed to the Division of State Police, had been misused. The money, I heard, was supposed to be used to improve our the emergency response system connected with all 911 calls – but that this was not how it was being spent.

Turns out, it is true. Not only does an audit report exist, but the conclusion – that of some $162 million collected over all, not much has been spent on upgrading cellular 911 service – is there in reasonably plain language:

In 1989, the State Legislature passed Article 6 of the County Law – Enhanced Emergency Telephone System Surcharge Law (Law), which imposed a monthly fee on land telephone users to help pay for enhanced emergency communications systems. ... In 1991, the Law was amended to add Section 309 to the County Law for the purpose of establishing a surcharge on all cellular telephones in the State. ... Pursuant to Section 309, cellular service suppliers collect a 70-cent per month fee from all cellular phones and remit the revenue less an administrative fee, to the Division of State Police (Division) on a quarterly basis. ... The Division collected surcharge revenues of $43 million in the fiscal year ended March 31, 2001; since 1991, surcharge collections totaled more than $162 million. While the Division collects 100 percent of all cellular surcharges, it services only about one-third of the State’s population. As of August 30, 2000, of the State’s 18.9 million residents, the State Police dispatch centers serviced approximately one-third of the population.[1]

While the Division properly records and deposits surcharge revenues received, it does not know the number of providers who should remit revenues, or attempt to verify the accuracy of the amounts that are received. Further, our tests showed the Division spent surcharge revenues on a wide variety of goods that do not appear to relate to cellular 911. In addition, since there is no enhanced cellular 911 service operational anywhere in New York State, we believe the Division needs to plan for and operate an enhanced 911 system.[2]

We found the Division used funds from the Seized Assets Account to lease and purchase vehicles and equipment, and to pay for all kinds of miscellaneous expenses, most of which cannot be easily construed as costs related to the establishment and maintenance of cellular 911. Examples of these transactions include:

  • dry cleaning bills;
  • transportation and lodging expenses for a promotional exam; and then what happens if it runs to the next line?
  • a missing person search;
  • conferences;
  • flight safety training;
  • helicopter maintenance training and a helicopter international exposition; and
  • soft body armor purchases.[3]

That language is certainly clear enough. But despite the evident cost to consumers, and the overall sums at stake, this issue does not seem to have attracted a lot of public notice or attention, except for a few instances where articles mentioned the weakness of the 911 system in the wake of various accidents to which the police might have responded more effectively had there been a better, more effective, more efficient system. Even if the cost-per-user fees being collected are unlikely to break any cell phone user’s bank, that’s no excuse for poor management of these funds by the state, which is supposed to be acting in our interest by creating a better emergency response system in the first place.

[1] “Division of State Police, Cellular Surcharge Revenues, 2001-S-27,” audit by New York State Office of the State Comptroller, Page 4; available on the web at http://www.osc.state.ny.us/press/A01s027.pdf. All emphasis has been added by me.
[2] Ibid., Page 5.
[3] Ibid., Page 20.
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