Published: May 11, 2009 08:08 am      

ESD tax could get bigger

King says ‘no’ to bill that would allow 30 percent more tax authority

Galen Scott

gscott@weatherforddemocrat.com

A bill designed to give emergency services districts (ESDs) across Texas more tax authority is working its way through the Legislature without support from Weatherford’s representative, Phil King.

House Bill 3477, authored by State Rep. Valinda Bolten (D-Austin), would add five cents to the current cap on an ESD’s tax rate, which is 10 cents per $100 of property valuation in counties with a population of less than 2.4 million, such as Parker.

ESDs are becoming increasingly popular in suburban counties where much of the population continues to live in unincorporated areas and are not served by a municipal fire department.

In Parker County, ESDs based in Springtown, Hudson Oaks and Tin Top use tax dollars to contract with volunteer departments which, until the ESDs were created, relied on somewhat inconsistent stipends from the county, along with proceeds from fundraisers to protect people in rural areas.

Fire and emergency medical service providers are hopeful the HB 3477 and its companion measure, HJR 112, will gain enough support in the House and Senate to qualify for a slot on the statewide ballot, which is required before legislation pertaining to ad valorem taxes can be enacted.

If voters approve the constitutional amendment, then Parker County’s three ESDs would be able to call local option elections asking voters to decide whether or not they should be allowed to take advantage of the new tax cap created by Bolton’s bill.

Because tax revenue derived from an increase above the current cap could only be used for capital improvement projects, such as new facilities or land and not for operating expenses, a specific plan justifying the tax increase would have to be made available to voters within the district at least 30 days before the tax-increase vote, according to Bolton’s chief of staff, Elizabeth Hartman.

“In fact, part of the bill requires that the revenue generated from this possible increase go to a separate segregated fund for capital improvement so that it’s very transparent and easy for anybody to see at any time,” Hartman said.

If the tax is approved and the capital improvement plan is carried out, the tax is supposed to “sunset” and return to its previous rate.

Steve Malley, chairman of ESD No. 3, based in Hudson Oaks, supports the additional tax authority.

“It’s nothing we’ve discussed, other than that we would support it because we feel like it does give ESDs a little bit of wiggle room that cities have taken advantage of for years,” Malley said. “When you start looking — percentage wise — at what cities charge for their overall fire protection, ESDs are so far below that, that even if they went up this 5 cents, it’s still nothing compared to what cities charge.”

Furthermore, Malley noted money could allow ESDs to grow staff.

“See, what that does is, instead of tying up your current monies for buildings and land and apparatus, it can be used to fund that, and your remaining budget money is what you put towards personnel,” he explained.

Bolstering his stance against property tax in Texas, State Rep. Phil King (R-Weatherford) voted against the bill Thursday. In a statement provided Friday, King sympathized with the funding situation facing ESDs, but insisted increasing property taxes is not the proper solution.

“I pledge to work on any creative funding mechanisms to support the growing financial shortfalls that emergency services districts are facing, but I cannot support this funding method,” King stated. “The average tax payer is currently paying 40 percent of their income to the government in federal, state and local taxes and fees, and the Legislature has an obligation to protect Texans against any additional financial burden, especially in these challenging economic times.”

Both bills were postponed due to illness and are expected to go before House members today.