The cost of doing business for Harris County keeps going up.
Rising credit card fees have increased that portion of the county government’s banking bill by $1.7 million in two years.
In the year that ended in February, the county paid 36 percent more in fees for customers who pay with plastic to cover their tolls and taxes than it did two years before.
The fees are a tiny portion of the county’s $1.4 billion budget, but the higher bills come during a budget crunch that has resulted in layoffs and a hiring freeze. Just the recent increase in fees would be enough to put 31 new sheriff’s deputies on the streets of Harris County. Rising credit card fees were “a large part” of the reason the Harris County Toll Road Authority stopped allowing people to pay airport parking fees with their EZ Tags earlier this year, said Peter Key, the authority’s director.
The Chron story about the EZ Tag debacle did mention the processing fees, which amounted to $70,000 a month, as a reason. Looking back at what I wrote at the time, I must have assumed it was a flat rate that HCTRA was being charged, but clearly that was not the case.
[County Commissioner Sylvia Garcia] suggested that the county consider going out for bids for banking services again next year in hopes of getting another bank to offer lower fees or to pressure Amegy Bank to give the county a better deal.
Key pointed the finger not at Amegy but at the credit card companies as he spoke after the meeting of his frustration over the rising costs.
“They’re just jacking up the transaction fees,” Key said. “The cost ultimately is going to be born by the merchants,” he said, in this case the Toll Road Authority. The tax office, though, passes on charges of $3.95 per Visa debit card transaction and 2.15 percent for most credit cards.
“What has happened is not Amegy but Mastercard and Visa have exponentially increased their fees,” said Edwin Harrison, director of the county’s financial services division.
Indeed, and it’s something that Kevin Drum has written about a few times. Basically, the credit industry soaks the masses to reward the high end users with things like frequent flyer miles and cash back. I’m a beneficiary of that system, but it’s one I’d be happy to see changed, since it’s a huge transfer of wealth away from folks who can’t afford it. Not really something Harris County can do much about, though. Just keep it in mind the next time you hear someone yammer about the unrestrained growth of government spending. There’s an awful lot of it that’s just not in their control.