Home Insurance to Include Fire Fighting Fee

As Gov. Arnold Schwarzenegger repeated his call for a solution on a budget that would not need to charge for higher taxes, he and his blue-ribbon fire task force said to lawmakers that there should be an emergency surcharge on home insurance policies.

According to Schwarzenegger, all year there are a lot of fires that occur in California, and so this should be prioritized. So far, Cal Fire, other local agencies and even the military have contributed to improve the state’s capability to respond to accidents. However, he said that the job is not yet really done. He hopes that lawmakers would approve this to be part of the budget so that the state can use the money to further improve their emergency plan.

The proposed fee that would affect house insurance policies is worth $48.00 on a lot of houses and businesses, and this is expected to generate around $480 million a year. Along with covering a $76 million shortfall that faces Cal Fire, part of the money would be given to local fire departments that are now under pressure from budget cuts.

The Republican government insisted that higher taxes should not be part of any agreement that would close a $24.3 billion worth of deficit. As Schwarzenegger responded to a question that was posed to him last Monday, he said that a home insurance surcharge is not actually tax.

The home insurance increase, according to Schwarzenegger, would go directly to protecting homes. There is currently a need to have more fire trucks that would work, and something has to be able to pay for that.

This proposal, named the Emergency Response Initiative, is a lifeline that would help the mutual aid system in the area. This makes it possible to respond with force to major fires, when the Bay area would start trembling, or when there is a major flood.

Democrats have been showing support as well, for additional revenue dedicated to fire fighting in California. However, they say that the home insurance surcharge is also a tax increase, only taking a different name. According to Jim Evans, spokesman of Darrell Steinberg, Senate President pro Tempore, this is clearly a tax increase. Democrats even emphasized their point by including the surcharge in a bill that would also raise taxes for tobacco and would also create a tax for oil production in the area.

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