A north El Paso County fire protection district is among the first in what could become a long line of local governments weighing a property tax increase due to falling property values.
The district will ask whether the community it serves wants to raise taxes or see response times erode — the only two choices it has, given its declining revenues.
“The citizens of Black Forest own this fire protection district. They’re the boss,” Pete Burleson, district board chair, said in a press release. “We are going to explain the problem to them, and ask them how they want us to solve it.”
The district’s operational mill levy is 4.965 mills, one of the lowest in the region.
More from the release:
Since the Taxpayers Bill of Rights was passed in 1992, district officials have not asked citizens to increase that tax. Instead, the fire department has improved its equipment and services with grant funding, and by billing insurance companies for ambulance transport services.
The economic downturn led to a dramatic drop in ambulance income. More patients lost their health insurance, and fewer calls were referred to the department by American Medical Response, the ambulance company that serves the rest of the region.
If a temporary slump in ambulance revenue was the only problem, the district could ride out the storm.
But property values have dropped significantly, and that has reduced the district’s annual property tax revenue. That reduction is likely to continue for years, until property values recover and homes are again reassessed.
“By itself, a tax revenue cut would be a serious problem,” explains Fire Chief Dave Ury. “But when you add the reduction in ambulance revenue, it paints a grim financial picture.”
Five years ago, all indicators pointed to a growing community that needed more fire protection, and that could provide the tax revenue to pay for it. Based on that, and with help from a five-year federal grant program, the mostly-volunteer fire department hired a small staff of full-time firefighters/EMTs. That move quickly led to faster response times, better services, and lower insurance premiums for local homeowners.
The budget crunch now threatens those positions. With fewer staff on duty 24x7, the department would need to rely more heavily on volunteers. Response times could increase, and insurance rates would likely climb back to the higher prices of 2006.
“This fire department is not going away,” Chief Ury emphasized. “No matter what our citizens decide, we’ll still answer the call. The question is how we are going to do that.”
The fire district isn't the only agency that will find itself strapped in the next couple of years. Due to falling property values brought on by the mortgage crisis and recession, agencies' property tax revenue also will decline next year.
El Paso County is anticipating a $7 million decline, for example.
But under the Taxpayer's Bill of Rights, governments can't raise their mill levies without voter approval. Even if agencies ask voters to raise the levy to bring in exactly the same number of dollars as before, a vote of the people is necessary.