Arizona’s fire districts today find themselves facing a serious public safety crisis, one that impacts more than 1.5 million Arizona residents who rely on fire districts for 911 services. Already, districts statewide have slashed scores of fire fighters and paramedics. Others have been forced to close fire stations. These cutbacks have caused emergency response times to rise, leaving the public at high risk at precisely the moment they need public safety services the most.
The root cause of this crisis? Our fire districts have suffered five nearly simultaneous blows that combined to cripple district budgets, including: a massive decline in Arizona’s economy; an arbitrary cap on fire district levies of $3.25 per $100 of assessed valuation; a mandated change from secondary assessed values to assessments on limited property value; the indexing of property tax values to the bottom of the housing market; and the passage of Proposition 117, which limited growth in fire district tax assessments to no more than 5 percent annually.
The recession that began in 2007 impacted every one of Arizona’s 156 fire districts. Following the housing collapse, individual fire districts lost as much as 48 percent of their revenues, resulting in widespread layoffs and positions left vacant. In the Pine-Strawberry Fire District, where I serve as chief, we reached the $3.25 tax levy cap three years ago. In response, we’ve eliminated three fire fighter/paramedic positions and two civilian part-timers. This budget year saw our first increase in tax revenue since 2010. However, this $18,000 increase was more than offset by a $28,000 increase in health insurance costs, leaving us again forced to find places to cut. Without a change in the tax levy, we’re likely to face more positions slashed or the closing of a fire station.
In 2005, the Legislature raised the tax levy cap from $3.00 to $3.25 per $100 of secondary assessed value as part of a deal to reduce the tax burden on commercial properties. This change resulted in little, if any, gain in revenues for fire districts. However, the switch placed an additional tax burden on residential properties. Today, had there been an inflation formula attached, the cap would be $5.09 and there would not be a crisis.
The next blow was the change to the manner in which taxes were assessed, moving from secondary assessed values to the more restricted limited property values – a move that further reduced available tax revenue.
The passage of Proposition 117 in 2012 further hurt fire districts by indexing property values to the point in time when home values were at, or near, the bottom of the housing market. As a result, the baseline formula for calculating taxes was set at a lower rate. Couple this with Prop 117 limiting property tax growth to no more than 5 percent annually and you complete the dire picture for fire district revenues.
The bottom line? Fire districts continued to be squeezed by statutes that prevent us from generating tax revenue. Meanwhile, the cost of operating a fire district continues to soar at a rate that far outpaces revenues. Today, 70 percent of Arizona fire districts have less than $50,000 in available tax levy revenues. Analysis by independent experts projects that under the current levy cap it will take many fire districts 12 to18 years to recover to 2009 staffing and service levels!
The Arizona Legislature must address this crisis during the 2016 session. Further delays will mean more fire fighters and paramedics laid off, more fire stations closed and further spikes in response times. The public safety crisis will continue to grow.
District fire chiefs and district Boards favor removing the arbitrary $3.25 cap and letting voters choose the level of services they desire and can afford. Fire district boards would establish the tax levy amount, much like cities and town councils do for their budgets. Voters would select or reject board members, just as they do in cities and towns. Fire chiefs and their boards note that restrictions established in the 2013 SB 1387, combined with Proposition 117 limits, will adequately control growth to reasonable levels while resolving the crisis.
— Gary Morris is chief of the Pine-Strawberry Fire District