Proposed elimination of fire tax districts could mean tax hike

Arguing that "the eastern area of the county has been subsidizing the west," Howard County Executive Ken Ulman is proposing to eliminate the system that has rural residents paying a lower fire tax rate.

It is a move that will inevitably lead to rate change for at least one side of the county.


"I don't think people who live in the western end of the county expect to have less fire protection and emergency medical services," Ulman said. "We don't charge different rates for police services or library services or park services."

The County Council is scheduled to introduce Ulman's bill — which eliminates the two-district tax system — on Monday, March 5. A public hearing on the proposal is scheduled for March 19, with a vote scheduled on March 29. All meetings will be held at 7:30 p.m. at the George Howard Building, in Ellicott City.


If the bill is approved, Ulman will propose a single countywide fire tax rate when he releases his fiscal year 2013 budget in April. The proposed ratewould have to be approved by the council.

While Ulman said he has not yet decided on a proposed countywide rate, the proposal comes at a time when the county Department of Fire and Rescue Services is facing between a $15 million and $20 million deficit, according to Chief Bill Goddard.

"While one could say it's a tax increase, I call it a tax adjustment," Goddard said.

The fire tax, paid through a line item on county residents' property tax bills, funds most of the fire department's budget, which includes services from 11 stations staffed by career and volunteer fire fighters.

County residents who live in the rural west, outside of the county's metropolitan district that is served by public water and sewer, pay 11.55 cents per $100 of assessed property value. Residents in the east pay 2 cents more at 13.55 cents per $100 of assessed value. For example, a home assessed at $400,000 would cost an owner in the east $542 in fire taxes — $80 more than the $462 a homeowner in the west would pay.

The fire tax rates have remained unchanged since 2007, when the council approved a one-cent increase to the rates in both the rural and metropolitan districts. That year, Ulman proposed raising the tax by 3 cents in the west and 1 cent in the east so the rates would be equal. The council shot that down and instead approved the one-cent increase in both districts and took $1.6 million from a fire department contingency fund to help pay for the expenses Ulman was looking to fund with the tax increase.

Though the fire tax rates have been the same for five years, revenues have declined in the past three years — from $68.7 million in fiscal 2010 to $62.0 million in fiscal 2012 — as the recession brought declines in property value assessments.

"While our revenue has been dropping off over the last few years, certainly our expenditures have been steady," Goddard said. "Really, what I'm shooting for in the short-term is to get us back to pre-recession rates."


Council wants details

Goddard and Ulman noted a countywide fire tax rate would not be finalized until after the County Council decides whether or not to approve the consolidation of the two tax districts.

"We'll have a discussion about what the rates will be in the context of the budget," Ulman said.

Council members Courtney Watson, an Ellicott City Democrat, and Jen Terrasa and Calvin Ball, both Columbia Democrats, said they would need to take a closer look at the details of Ulman's proposal before making any decisions.

"Probably one fire district makes sense," Watson said.

Council member Greg Fox, a Fulton Republican, said he has not set on any particular approach, but he does have a number of concerns about Ulman's proposal. One is the real reason behind the need to consolidate the districts.


"The proposal is more than just we're unifying them," Fox said. "The proposal is that they're looking for more money because the surplus is gone."

The fire contingency fund had $10.2 million at the start of fiscal 2012, down from $11.2 million in fiscal 2010.

In addition to the declining fire tax revenues, part of the reason the surplus has been depleted, Fox said, is that when Ulman took office he started using the fire tax operating funds to pay for capital expenses.

"It was a way for Ken to start balancing the general fund budget," Fox said.

County spokesman Kevin Enright denied that accusation. He said the fire tax funds were used to replace bonds, not general funds.

In opposing Ulman's proposal to equalize the rates in 2007, Fox had said that he wasn't convinced the level of service in the west matched the level of service in the east. Though he recognizes things have improved since then, he said some inequalities still exist.


For example, he noted insurance companies charge more to cover people who live further away from a fire station and water source. Also, in the west, where the population density is far lower than in the east, some people are paying higher insurance premiums. Fox said a possible compromise would be to equalize the rate but provide a tax credit for people who still face inequalities from an insurance standpoint.

Council chairwoman Mary Kay Sigaty, a Columbia Democrat, could not be reached for comment.

'No difference' in service

The county fire tax was established in 1955 with six separate tax districts, one for each volunteer fire company in the county. The county did not start hiring full-time firefighters until the 1970s.

In 1993, the county switched to two districts, with the end of the public water and sewer service area serving as the division.

With increases to fire services provided in the western part of the county in recent years, Ulman said he believes the time is right to finally end the district system and require residents to contribute at the same rate.


Previous attempts to eliminate the district system have failed, but Ulman and Goddard said there have been several changes to equalize services since then. They said the average emergency response time is six minutes in every area of the county.

Ulman and Goddard also noted several improvements that have been made in the western part of the county in the past few years: the Glenwood fire station that is expected to open later this year; the relocation of the West Friendship fire station; and the 14 underground water cisterns that have been added to improve the water supply in the west.

Goddard said "there's no difference" in the level or quality of fire and rescue services provided across the county and that rescue teams often cross district lines.

Though Goddard said he never hesitates to provide firefighters where they are needed, it can create an "administrative nightmare" because he has to do separate accounting for the two districts.

"I have a set of books for the rural side, and I have a set of books for the metro side," he said. "It's a system that is long overdue for some overhaul."