A 66 cent fee on local monthly cell phone bills intended to pay for 911 emergency location technology is now a windfall for the cash-strapped state.

State lawmakers are moving $16 million from the cell phone fund to help balance the state budget and they may grab future revenue from the fee.

The enhanced wireless 911 technology, which was the reason for adding the fee, has been deployed statewide and the system has been paid for. But instead of canceling the fee — which equates to $31.68 a year for a family with four phones — the state continues to collect it and use it for general purposes.

The Legislature has rejected requests to reduce the fee by Gov. Linda Lingle and the board that oversees the fund.

The fund was set up to pay for the technology that helps emergency service dispatchers identify the location of those who dial 911 from cell phones. Enhanced wireless 911 technology is especially helpful in situations where callers are disoriented or are unfamiliar with their surroundings. About 60 percent of all 911 calls are made by cell phone users.

Created in July 2004, the tax generates about $670,000 a month. It has a balance of about $25 million, but under legislation passed last week that surplus will be reduced to about $9 million. However, the monthly fee will remain unchanged at 66 cents.

State Rep. Marcus Oshiro, D-39th (Wahiawa), chairman of the House Finance Committee, said the money that's transferred will still serve a public purpose.

"It goes to the benefit of the general public so the money is not lost or squandered somewhere," he said. "It goes to pay for services like hospitals or schools or parks."

Some have questioned whether the fee, which has no expiration date, is even needed at all.

"The objective (of the fee) has been nearly totally realized," State Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai) "They should take out whatever money to make sure everything gets done and then refund the rest to the wireless payers."

However, Slom doubted that the state would eliminate the fee anytime soon.

"As long as there's any money at all (in the fund) there's always going to be proposals to spend that money," he said. "It's another one of those small revenue streams and unless you add them up and put them all together the public is not aware of it."

$294,921 JOB FILLED

Instead of eliminating the program the state seems intent on keeping it going. Last month the Department of Accounting and General Services hired a new executive director for the program at a cost of $294,921 for three years.

This year was the second-straight year the Legislature has declined to reduce the fee. Last year the board that oversees the fund, which is made up of public safety, cell phone and telephone officials, recommended lowering the fee.

This year Lingle recommended reducing the fee to 46 cents and withdrawing $9 million to help balance the budget.

State Comptroller Russ Saito, who also serves on the Wireless Enhanced 911 Board, said the original purpose of the fee has been largely fulfilled. The question now is whether the excess money should be spent to make cell phone services available in "dead" areas where cell phone coverage is spotty, such as valleys, rural areas and inside buildings.

Cell phone location technology "is available state- wide," Saito said. "It's just that there's not 100 percent geographical coverage. In certain areas of the state people don't get wireless service so they can't call 911. Part of what the board would like to do is extend service into those areas."

Maintenance and expansion of the wireless caller locator service could still occur even with a reduction in the fee, Saito said.

"As a Cabinet officer looking at what was being taken in versus what was being spent ... my recommendation was to reduce the fee," he said. "We could still cover our costs. We could still cover some of the expansions that we wanted."

$30.8 MILLION RAISED

As of November the monthly cell phone fee had raised $30.8 million, however, only $8 million of that had been spent — a figure that includes $1.1 million in consulting fees. The state also received a federal grant of $1.2 million to build the system.

Most of the money spent from the fund has gone toward purchasing and installing equipment in city and county 911 call centers.

Additionally, the fund has been used to reimburse public safety officials for trips to Mainland conferences and for equipment such as wireless headsets for 911 operators.

Wireless phone companies also benefit from the fund. They get to keep 1.32 cents of the 66 cents to cover costs associated with collecting the fee. So far wireless companies have received little from the fund, but that could change if board members move ahead with a plan to build one or two cell phone towers a year at a cost of $1 million to $1.5 million per tower.

Budget-challenged public safety agencies also have designs on the fund, which they hope will be used to help pay for other 911 call center equipment and services. The Honolulu Police Department denies that a surplus even exists. HPD, which received $1.2 million from the fund last year, said it now needs a new $20 million computer-aided dispatch system.

"The HPD has barely touched the surface of our need for assistance from the fund," wrote HPD Major Marie McCauley, in recent testimony to the Legislature.

Wireless 911 board members and Lingle also have asked, so far unsuccessfully, that the Legislature expand the purpose of the fund so it can be used to buy equipment that allows emergency responders to locate wireless callers using Internet-based phones and text-messaging services.

RAIDS PREDICTED

Lowell Kalapa, head of the private, nonprofit Tax Foundation of Hawaii, said the state's decision to transfer money from the cell phone fund to the general fund is legal. However that doesn't make it right.

"Cellular users were promised certain services in return for paying an additional charge," he said. "If in fact that service has been delivered and the fee continues, then I would say those people who want to spend the money on other things such a cellular towers are on shaky ground."

Both Kalapa and Slom predicted in 2006 that the Legislature would ultimately raid the enhanced wireless 911 fund to pay for other state needs.

"When they went in with the legislation, they had absolutely no idea how much the system would cost," Kalapa said. "When you set up a fee without knowing the scope of the project, it's either going to be too little or too much. In this case, it's become a target to swipe."