Summit County fire districts propose ballot measure to maintain funding levels
September 11, 2018
Summit County's fire protection districts are among several across the state asking voters to consider a new ballot measure this November intended to stabilize revenues in the face of daunting budget reductions.
Summit's fire districts are facing dire financial straits. Both Summit Fire & EMS and the Red, White & Blue Fire Protection District continue to face a rapidly growing number of emergency calls in both volume and complexity, as well as an expanding wildfire season that now reaches from March to late October. But their budgets continue to drop, in large part due to the Gallagher Amendment, a 1982 amendment to the Colorado Constitution that caps revenues from residential property values.
"Our budgets have been dropping for a long time," said Jeff Berino, fire chief at Summit Fire & EMS. "Every two years we've been seeing less income. We've absorbed the hits over the years, but it's time to draw a line in the sand."
The Gallagher Amendment effectively divides the state's total property tax burden between residential and nonresidential properties. According to the amendment, only 45 percent of the state's property taxes can stem from residential property, while the other 55 percent must come from commercial properties. In addition to the percentage cap, the amendment mandates that the assessment rate for commercial properties be set at 29 percent, while the residential assessment rate is adjusted annually to maintain the 45-to-55 percent split.
More simply put, whenever residential property values are growing faster than commercial property values, homeowners are contributing more than their 45 percent share, and a mandatory tax cut for homeowners is triggered. While that might sound desirable for homeowners, there are unintended consequences that come into play, such as massive budget cuts for the fire protection districts that get a majority of their funding from residential property taxes.
When the amendment was passed in 1982 the residential assessment rate was set at 21 percent, but residential property values have risen at a much higher rate than commercial properties since that time, and the Colorado Legislature has reduced the residential assessment to 7.2 percent. Adding to the issues with the Gallagher Amendment is the Taxpayer's Bill of Rights, or TABOR, another amendment added to the Colorado Constitution in 1992 that requires voter approval to raise taxes. This means that the assessment rates can't go up without voter approval, even if residential property values plummet or commercial property values skyrocket. Residential assessment rates are anticipated to drop again in 2019 to around 6.1 percent, which could cost both fire districts about $1 million annually in lost funding.
Summit's fire protection districts have already felt the affects of the Gallagher Amendment. Almost 88 percent of the budget for the Lake Dillon Fire Protection District comes from residential property taxes, and the agency saw a budget reduction of more than half a million dollars in 2018 alone due to the assessment reduction. Red, White & Blue and the Copper Mountain Consolidated Metro District are facing similar issues. Unlike school and water districts, there's no extra money from the state or opportunities to raise fees to mitigate the affects.
The Lake Dillon Fire Protection District and the Copper Mountain Consolidated Metro District are both represented by Summit Fire & EMS, though still operate legally as separate entities.
But despite the budget reductions the fire departments are busier than ever. Summit Fire & EMS has seen a 26 percent increase in call volume since 2010, while Red, White & Blue has seen a 50 percent increase in the last five years. In addition, while the wildfire season traditionally consists of four months, the season has continuously grown over the years to now span almost eight months. With growing demand and shrinking budgets, the agencies fear that reduction of services and staffing could be on the horizon.
Chief Jim Keating of Red, White & Blue said that mitigation efforts like fire breaks will be the first to go.
"You have your list of what you're going to cut first," said Keating. "Mitigation and prevention programs will go first. We spent over $100,000 in overtime this year doing mitigation inspections, and it's not uncommon to have 40-50 mitigation requests in our queue at any time. They'd be the first to go."
But staffing cuts could be close behind, according to Berino.
"We will have to make hard decisions, which will ultimately affect personnel and service levels," said Berino. "We're talking about a million dollars. Sooner or later it's going to be salaries."
Berino noted that almost 90 percent of Summit Fire's budget goes to salaries, and Keating said Red, White & Blue's numbers were similar. Summit Fire & EMS currently operates on a budget of about $10.1 million a year, while Red, White & Blue operates at about $8.8 million annually.
Budget reductions will likely mean layoffs and reduction in services, which in turn will likely lead to increased response times, reduction of public education programs, delays of capital improvements like new fire engines, and could even affect the safety of the agencies' firefighters.
"Both districts feel very strongly about giving our firefighters the safest equipment we can afford," said Berino. "We've got a lot of young firefighters, and I want them to have a long career."
But there might be a solution in the form of new ballot measures Summit residents can vote on in November. While each district will have their own measure with different language, they all essentially add up to the same result: freezing residential assessment rates at the current 7.2 percent.
If passed, the measures would essentially create a floating mill levy — a tax rate that is applied to the assessed value of a property — that the districts could raise or lower to maintain the 7.2 percent rate. If the state decides to further lower residential assessment rates, the districts would increase mill levies on residential properties accordingly to stabilize revenues year to year. In this capacity, the measure could help maintain the districts' revenue streams, without raising taxes for property owners.
If the Gallagher Amendment were to be repealed, the measures would essentially be nullified.
"As we are seeking revenue stabilization, we're trying to keep the 7.2 percent assessment rate," said Bryan Webinger, district manager for the Copper Mountain Consolidated Metro District. "It's not a money grab, we're just trying to help the community."
"Our priority is public safety," added Berino. "Without public funding, our hands are tied. We don't have any other way to provide it without proper funding."
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