The Fort Lewis Mesa Fire Protection District is asking voters this fall to approve two ballot measures with the hopes of reinvigorating the financially strapped, mostly volunteer department.
One measure would disqualify the district from a state constitutional amendment designed to keep a consistent ratio between residential and commercial property tax – an adjustment to taxes that resulted in a loss of $30,000 for the district in 2017 – and the other measure would increase property taxes by 2.5 mills to raise an estimated $120,700 annually.
The mill increase would result in an additional $18 per year for every $100,000 in assessed value on a home. The Fort Lewis Mesa Fire Protection district covers western La Plata County, including Hesperus, Kline, Marvel and Redmesa.
“We’re spending the last couple years out of our reserves, and that’s not a healthy place to be in,” said Fire Chief John Lee.
The new money would restore the district to about 2015 revenue levels and would be used to recruit and retain volunteer firefighters, recover operating funds lost from property tax adjustments, repair and replace aging equipment, maintain and improve facilities, improve water storage and respond to an increased call volume.
The reason Fort Lewis Mesa Fire Protection District is so strapped has to do with the Gallagher Amendment. The state has continually decreased the amount of property tax it collects from residences to keep a ratio of 45 percent residential property tax to 55 percent commercial property tax, a ratio set by the 1982 amendment. Gallagher mandates that the tax for commercial properties be fixed at 29 percent, while the levy on residential property can be changed to keep the revenues from property taxes balanced.
So when home values rise faster than those of commercial properties, like they have in recent years along the Front Range, which includes metropolitan Denver, it can trigger a statewide tax cut for homeowners. Last year, it triggered a 9.5 percent cut to residential property tax assessments.
Since 1982, the state has ratcheted down the tax rate for residential properties from 21 percent to 7.2 percent as property values have increased across the state. The ratcheting-down effect has adversely and disproportionately affected rural communities, which have fewer commercial properties. Most of the revenue rural communities receive comes from residential property taxes, a levy that’s been decreasing.
Commercial property tax, which is fixed, accounts for far less revenue when compared with residential property tax, which is fluid, in rural areas. That means rural communities see much more fluctuation in property tax revenue compared with urban communities.
And with the portion of residential property taxes falling each year, small, rural fire districts have had revenues cut disproportionately to large, urban districts.
Voters in the Pagosa Fire Protection District passed a ballot measure in May to allow the fire district to “de Gallagher,” a move to maintain residential property tax rate and increase the mill rate to compensate for what was lost as a result of the tax-rate adjustments mandated by the Gallagher Amendment.
“The mill levy increase is going to increase our funding to the point that we’re adding eight firefighters, which will give us the ability to go to a three platoon system,” said Randy Larson, fire chief for Pagosa Fire Protection District.
Lee said he hopes the ballot measure will pass, allowing him to train and equip more than 20 volunteers who serve with the fire protection district.
“Bringing on a volunteer is so affordable, but it still costs money,” Lee said. “In the declining revenue stream that we’ve had, now we’re on an inclining firefighter and EMT response, and it’s been quite a challenge for us to continue to fund that.”