SONOITA — As chief of the Sonoita-Elgin Fire District in Santa Cruz County, Joseph De Wolf oversees the response to everything from large wildfires to rollover accidents involving speeding trucks full of illegal migrants.
He does it all on a budget of only $890,000 – not enough to meet the challenges he confronts every day, he says.
“We’re under a huge amount of financial pressure right now,” De Wolf says. “I don’t have what I need to cover my area.”
De Wolf has other pressures to contend against as well. For more than a year, he and others in the county have been battling a lawsuit from local residents that protests the formation of the fire district two years ago, and the additional property taxes the district imposes on homeowners.
The lawsuit is just one example of the growing dissatisfaction across Arizona with the state’s fire district assistance tax. Fire districts provide both fire suppression and emergency medical services for many residents outside of major metropolitan areas.
Over five years, levies for the state’s nearly 160 fire districts have grown by 129 percent, an average of 26 percent per year since 2003, according to the Arizona Tax Research Association. That’s more than three times the rate of growth for total property tax levies over the same period.
“The one jurisdiction that has aggravated taxpayers more than any other are the fire districts,” says Kevin McCarthy, executive director of the Arizona Tax Research Association. “Fire districts have flat-out abused taxpayers throughout the state.”
Most property taxes in the state are capped at an overall growth rate of 2 percent per year. Yet under state law, fire districts have no cap on their year-to-year growth, and are free to raise levies up to a maximum rate of $3.25 per $1,000 in home valuation.
Unrestrained by law, many fire districts took advantage of soaring property values to raise levies far beyond the growth rate of other taxes.
Anti-tax activists such as Marc Goldstone, chairman of the Arizona Tax Revolt, a voter initiative that would cap property tax increases for all tax districts at two 2 percent per year, have used fire districts as the “poster child” of property taxes gone out of control.
Neither the Arizona Tax Revolt, nor a similar initiative, Proposition 13, made the 2008 ballot after failing to collect enough voter signatures. But if their supporters regroup for 2010 and are successful in curbing the powers of tax districts, the fiscal impact will be severe for rural fire chiefs.
“If Prop 13 goes through, I would anticipate that fire district funding would probably decrease by at least a third or one-half,” says Rick Southey, Bullhead City fire chief and president of the Arizona Fire Districts Association. “There’s no way around it. Services will be cut.”
Both initiatives would rein in the taxing powers of special districts, and rely on differing formulas to achieve that end. Proposition 13 would roll property values back to 2002 levels, and cap further increases at two 2 percent annually. The Arizona Tax Revolt proposition, while also rolling back property valuations and capping tax increases, would further require a two-thirds majority vote for any taxing entity to raise future property levies.
The Arizona Tax Research Association, under the leadership of Kevin McCarthy, opposed both of last year’s property tax initiatives. But he has lobbied the legislature to curb the taxing power of fire districts.
With voter anger mounting, the state legislature may ultimately take the matter into its own hands, and pass legislation along the same lines of the initiatives. Unless some action is taken, enough voters may ultimately be swayed to approve a radical anti-tax initiative, regardless of the consequences.
“When they get irritated enough, they don’t care what the impacts are going to be of some of these measures,” McCarthy says. “If Prop 13, or something like it passes, [fire districts] should view it as a self-inflicted wound.”
The impacts of any major restriction of fire districts’ taxing powers would likely fall disproportionately on the state’s poorer regions. With local property values well below those of wealthier areas, these districts are already struggling to provide an acceptable level of service. Rolling property tax valuations back to 2002 levels would be particularly devastating.
“How are we going to maintain our labor and our growing call volume?” asks chief De Wolf. “How can I pay wages that are competitive when I’m working off a budget that’s six years old?”
De Wolf says he must already rely on volunteer help to provide services to the 2,000 homes and 3,000 residents in his district. Spread over 350 square miles, the region is home to Arizona’s wine country, and its rolling hillsides are increasingly dotted by “cowboy mansions” built by the retired ultra-rich.
But as volunteers are called on to assist with car rollovers and other gruesome incidents, this solution is proving problematic.
“When people volunteer, they volunteer to help with the grandma who fell and broke her hip,” De Wolf says. “They don’t volunteer to come onto a scene with an overturned truck full of illegals with massive head injuries.”
As for the lawsuit against De Wolf and other county officials, its outcome is yet to be resolved.
Nevertheless, this November, voters in Santa Cruz County voted by an overwhelming margin against dissolving the Sonoita-Elgin fire district, dealing a significant blow to the lawsuit’s backers.
As a result, many of the lawsuit’s supporters have dropped out. Yet Tom Pescod, an area veterinarian and the lead plaintiff in the case, is carrying on – and still demanding $1 million in compensation.
“It’s a nice number,” he told opposing attorneys in a court deposition. Pescod did not respond to TZR’s numerous requests for comment.
On the state level, anger against high property taxes may be slow to dissipate. Even as property values plummet, relief from fire district taxes may still take some time. This year’s taxes will be based on 2007 property values – well before the big plunge seen in 2008.
“Taxpayers won’t see increases,” McCarthy says. “But they’re not likely to see a lot of relief.”