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Hawaii News

$16M from e911 fund used to balance budget

State officials raided $16 million last year from a special fund paid for by cell phone customers to help balance the budget, the Federal Communications Commission reported.

Hawaii was one of 10 states that in 2009 took money from the special fund created to maintain the islands’ e911 system, which rescue crews often praise for helping to find lost or injured hikers.

Isle cell phone customers are charged a fee by their carriers that goes into Hawaii’s so-called Wireless Enhanced 911 Fund, set up to maintain and improve the e911 system.

Emergency responders need to constantly keep up with changing cell phone technology to pinpoint the location of a cell phone call by triangulating from cell phone towers or by using global positioning system technology, said Jim Schuler, spokesman for CTIA the Wireless Association, a Washington, D.C.-based cell phone industry trade association.

State Sen. Donna Mercado Kim (D, Halawa-Moanalua-Kamehameha Heights), chairwoman of the Senate Ways and Means Committee that considered bills to transfer the money, suggested that Hawaii’s e911 fund was vulnerable during a time of fiscal crisis because it was flush.

"If the fund is for 911 and they have excess balances, perhaps they (cell phone companies) are charging too much," Kim said. "The intent was to make themselves self-sufficient. But if there is over and above the actual money needed, what happens to that money?"

Schuler, of CTIA the Wireless Association, said state legislators actually set the surcharges that cell phone companies charge customers.

"The reason we get so exercised about it is that our customers are levied a fee for 911, and they think they’re helping to pay for that," Schuler said. "What Hawaii did was use it for other purposes. If there is an excess, that’s usually a red flag for a legislature to raid the fund. … Rarely is a rate then lowered by a legislature."

Five states raided their 911 or e911 funds to balance their budgets in 2008, according to a report released Aug. 13 by the FCC.

In 2009 five more states — including Hawaii — turned to their 911/e911 funds, according to the FCC.

The FCC did not criticize Hawaii or the other states, but did say, "In short, at the state level, most states used the 911/E911 fees they collected in 2009 solely to fund 911/E911 services."

Gov. Linda Lingle had proposed using $9 million of Hawaii’s Wireless Enhanced 911 fund to help plug the 2009 budget deficit. One of several bills lawmakers introduced would have given the governor approval to use $5 million of the fund.

Even after the efforts were fought by the Honolulu and Maui police departments, the Kauai Fire Department, cell phone companies, the National Emergency Number Association and the 9-1-1 Industry Alliance, Lingle ended up with legislative approval to take $16 million out of the e911 fund.

Hawaii’s 911 system handles more than 1.15 million calls annually throughout the islands, Maui Police Chief Gary Yabuta wrote to legislators, asking them not to tap the e911 fund.

"These funds are important to the continued delivery of enhancements to the 911 network as devices continue to be introduced to the public … for text messaging, video messaging, telematics vehicles, all which use the 911 wireless network to request emergency response," Yabuta wrote.

The state’s budget crisis meant other special funds also were not immune last year, including $20 million from the Hawaii Tobacco Settlement Fund and $20 million from the Housing Revolving Fund.

Kim said the e911 fund is still projected to have $5 million in unencumbered reserves through 2013 — even after spending $21 million for system upgrades last year.

"That’s significant," Kim said.

In 2007 the fund spent $1.5 million on the e911 system and took in revenue of $7.8 million, Kim said. The cash balance was $11.8 million that year.

In 2008 the fund spent $4 million, brought in another $8 million and ended with a cash balance of $18 million.

This year the fund has an unencumbered balance of $7.6 million, Kim said.

Some people who testified against raiding Hawaii’s e911 fund said the move could jeopardize federal funds to improve 911 services.

"Congress is currently attempting to reauthorize the enhanced 911 act that actually punishes states that raid their funds," Schuler said.

But with millions of dollars in excess funds, Hawaii did not need to request any of the $40 million that went to 28 states, Puerto Rico and American Samoa last year to bolster their 911 systems.

The federal grants ranged from $4.3 million to California to $200,000 for American Samoa, according to the National Highway Traffic Safety Administration and the U.S. Department of Commerce’s National Telecommunications and Information Administration.

"Hawaii," Schuler said, "didn’t need to ask for any money."


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