Jackson leaders search for equity in fire tax debate

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Jackson leaders search for equity in fire tax debate

fr jaxfiretax Some Jackson County commissioners expressed trepidation this week over changing the way the county’s seven volunteer fire departments are funded.

The county currently spends $1.428 million annually to fund the fire departments. Each gets an operating budget and one full-time paid staffer to man the department. Equipment and construction is funded on an as-needed basis.

County commissioners have considered ending direct funding for fire departments and instead creating fire districts. Each would levy its own separate property tax to fund their fire departments. That kind of system is used by most counties in the state.

“Why consider a fire tax? Well, each fire district would stand on its own accord,” said Jackson County Manager Chuck Wooten, who seems to favor the switch.

Districts with higher property values like Cashiers would be better off, needing a much lower tax rate compared to communities with a lower property values, which would actually see a tax hike in order to bring in the same amount they now get from the county.

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Commissioners Mark Jones, Charles Elders and Doug Cody questioned the impact fire taxes would have on those communities with lower property values, however.

Residents in Whittier, Canada and Balsam would see a property tax increase of 2 to 3.5 cents, for example.

“What kind of a hardship would this put on them?” Elders asked, citing the fire districts he called “less fortunate.”

The across-the-board-funding formula used now means people in wealthy districts like Cashiers offset the cost of fire services for those in less wealthy areas.

If each community had to fund its own fire department without any help from the county at large, it would effectively amount to a tax hike for thousands of residents in the less wealthy areas in order to raise the same amount of money for their fire department.

“My biggest problem is probably the poorest people are going to get hit the hardest,” Cody said.

“If this goes through some people will be paying more taxes and that is definitely true,” Wooten said.

Commissioner Chairman Jack Debnam said a countywide vote would be the best way to settle it by letting the people decide.

“I think the people of Jackson County have a right to vote on it,” Debnam said.

Commissioner Vickie Green agreed.

But Cody asked whether those in less wealthy areas would be represented in a countywide vote.

“They don’t have the votes to speak on that,” Cody said.

“I think we need to start educating people that this will be on the ballot,” Debnam said, pushing for consensus among commissioners to hold a referendum.

But Cody, Jones and Elders weren’t ready to commit.

“Is this the only option?” Cody asked. “I’d like to discuss it a little bit more.”

“I would, too” Jones replied.

Jones and Cody asked whether the county could levy a 1-cent to 2-cent fire tax countywide and use it as a revenue stream to fund all fire departments rather than a patchwork of different tax rates for each geographic area.

“That way the impact across the board would be more equitable,” Cody said.

But from Wooten’s perspective, that seems inequitable.

Should people in Cashiers be asked to offset the cost of fire service countywide? Wooten asked.

“They pay a big supplement for the other districts,” Wooten said of the current system.

“That’s the way it is on any tax we levy now,” Cody pointed out.

All property taxes are based on someone’s property value, so if your property is more valuable than your neighbor’s, you pay more.

Wooten said the bigger issue, however, is a single countywide tax wouldn’t get commissioners out of the cat bird seat when it comes to deciding how much each district gets for buildings and equipment.

“It still puts somebody back in the position of deciding how to allocate those dollars,” Wooten said. “Do you want to be the ones deciding who should receive and who shouldn’t receive it?”

Cody and Jones said perhaps a countywide board could be appointed for that purpose with representatives from all the fire departments deciding that together.

Currently, any fire department wanting to build or renovate has to ask commissioners for the money.

This year, the ask included:

• $4 million from the Cullowhee fire department for a new main fire station

• $350,000 from the Savannah fire department for a new Greens Creek substation

• $100,000 from the Cashiers fire department to renovate the Norton Road substation.

The county can’t afford it all unless it raises taxes or cuts another area of the county’s budget, Wooten said.

“When you have three coming and there would likely be another one or two behind them that would like to have an expanded building, so how much can you continue to provide?” Wooten said. “You are not going to be able to fund the capital needs and all the operating funds of the departments at the current tax rate.”

Wooten said some fire departments like the idea because they would have the flexibility to set their own tax rate and bring in the money they need without going hat in hand to the county commissioners.

“A tax would provide a consistent level of revenue for the fire departments,” Wooten said.

What if a fire department decided to have gold plated faucets, asked County Attorney Jay Coward.

“Commissioners could say they think that is a little extravagant,” Wooten replied.

Commissioners have to rubber stamp the tax rates for each fire district, and thus could put their foot down if it seems a fire department is bilking residents.

Further, the county’s current formula of giving each fire department the same amount for operations doesn’t take their call volume into account, Wooten said. Fire departments that answer lots of calls get the same amount as those who don’t have as many.

“Perhaps there is an inequity of funding among our fire departments because of the variance in call activity,” Wooten said.

Better or worse off?

Jackson County currently spends $1.4 million in direct funding for fire departments. That amounts to about 1.3 cents on the property tax rate. If the county no longer funded fire departments, it could lower the property tax rate by 1.3 cents, since it no longer has that expense.

Meanwhile, individual fire districts would impose a new property tax to fund the fire departments. While the county tax rate might go down, whether you would see a net loss or net gain depends on where you live.

This list shows the tax rate each fire district would need to levy to bring in the same amount they currently get in direct funding from the county, based on current property values.

Cashiers: 0.3 cents

Canada: 5.4 cents

Balsam: 3.6 cents

Cullowhee: 1 cent

Qualla: 2.8 cents

Savannah: 4.1 cents

Sylva: 2.3 cents

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