8/26/2006Ohio City Creates Crash Tax
Stow, Ohio imposes a tax on non-residents who are involved in a crash.
The city of Stow, Ohio has found a way to turn a crash into cash. The municipality enlisted the aid of Cost Recovery Corporation, a for-profit company that bills itself as an "alternate funding source." Cost Recovery suggests the best way to for a city to make money without annoying residents is to make non-residents pay a tax when they are involved in an accident. Non-residents are unable to challenge any decision by the city council and have no voice in local politics.
"The program will yield $350/incident on the average, by collecting from the vehicular insurance without the residents ever receiving a bill," the Cost Recovery Corporation website states. "Studies show that non-residents account for 40-85% of the accidents, depending on the non-resident traffic volume."
Although the website claims that insurance companies will pay the tax without passing the cost on to consumers, insurance companies in most cases reject such bills. The Akron Beacon Journal documented a $401.08 bill delivered to Alex Patterson, 18, after a minor accident. The charges were listed as a $125 fine, $38.08 for a police investigation, $209.44 for the police vehicle to come to the scene, and $28.56 for paperwork.
Although a dozen Ohio cities use these tactics, Stow has temporarily suspended its program and will review it during a council meeting on September 11.