WCESD #4 hopes for support of sales tax
Williamson County Emergency Services District #4 Commissioners called a sales tax election for Nov. 3 in hopes of gaining voter approval to raise the local sales tax in the fire district by 1 cent. If passed, the revenue would be used to help fund a new fire station.
Nineteen months ago, the state comptroller estimated the revenue the ESD would earn from a sales tax rate of 1 cent would raise $300,000. Fire Chief Anthony Lincoln said the ESD’s ad valorem rate is capped at the 10 cent maximum per $100 property valuation. The sales tax election is another avenue to try to gain additional funding.
If approved by voters, a sales tax would be imposed at the point of sale on retail goods and services. That tax is collected by the retailer and passed on to the state. In Texas, the state sales tax rate is 6.25 percent.
In Liberty Hill, the local sales tax is 8.25 percent, with 6.25 percent going to the state and 2 percent staying in the city. On sales made within the City of Liberty Hill, the City keeps 1 cent for its General Fund, ¼ cent for its Street Maintenance Fund, ¼ cent for the Liberty Hill Public Library and ½ cent for the Economic Development Corp.
Thus, if passed, the 1 cent sales tax increase would apply only to those purchases within the ESD, but outside Liberty Hill city limits.
The Chief’s take
Holding a sales tax election was something that came to Lincoln’s mind shortly after he took over the fire station. He knew at least one more fire station would be necessary to keep up with the growth Liberty Hill is experiencing. Revenue from a sales tax could help meet that need.
“We talked about it for almost a year. I remember sitting and talking about it in this room here,” Lincoln said pointing to his office. “Cliff (Avery) came up here. I wanted him to give the information to the board on what’s entailed in doing that stuff.”
He said a sales tax is simply another revenue source that is more common among ESDs than most people realize.
The ESD earmarked $30,000 for an educational campaign related to the sales tax election. Commissioners contracted with GCP Association Services, LLC, a consulting firm owned by Cliff Avery, who is also the non-voting executive director of SAFE-D — the State Association of Fire and Emergency Districts. His son, Clay Avery, is an account manager in the consulting firm, and serves as assistant executive director at SAFE-D.
GCP provides most of the day-to-day management of SAFE-D. ESDs contract with GCP to help with publicity. SAFE-D is designed to educate appointed ESD commissioners and fire administrators.
What the experts say
In his time involved with sales tax elections held by ESDs across the state, only about two of 20 have failed, which Cliff Avery attributes mostly to lack of effective communication with voters.
Compared to ESDs, municipalities are spending two to three times as much for the same quality of service, he said. What residents moving to smaller but growing areas such as Liberty Hill don’t realize is that the city doesn’t provide fire emergency services. Those services are provided via the ESD, which was effectively founded by the people, for the people.
“You’ve got an aging baby boomer population. You’ve got fewer volunteers,” Cliff Avery said. “So you’ve got to get paid staff to actually come out and staff, especially during the day. You’ve got to have reliable funding so you can have services.”
Post 9/11 calls have become more complex and require different tools, he explained.
Bottom line is that while need continues to change and grow, people expect quality level of service.
Thus, sales tax is a valid approach, he said.
“By having a sales tax, people that buy something are paying a little bit for that protection,” he said. “All that highway traffic on (US Highway) 183 and (State Highway) 29, fire fighters don’t check IDs before they pull someone out of a wreck.”
The Averys said they don’t see the Legislature lifting the 10 cent property tax cap any time soon. Without alternative sources of funding, it will be harder for ESDs to make ends meet.
“The goal of the ESD is first rate level of protection. The same level as major municipalities,” said Clay Avery.
A sales tax election is an ideal option for ESDs that don’t or can’t raise property taxes. Sales tax also has the added benefit of spreading cost around, he said.
Generally, when voters hear about a tax increase, there is adversity.
“But if you explain why you need it and that it’s all about safety, you generally get support,” Cliff Avery said. “The key to success is to be open and transparent about how they’re going to use it.”
Generally, homes should be within five miles from a fire station. The lower an ISO rating the lower the home insurance premiums.
Educating the public
While ESDs cannot campaign politically they can educate the public about a sales tax election. That is why the ESD, in conjunction with GCP, is holding a town hall meeting on Oct. 8. More details will be announced at a later date.
“ESDs cannot campaign,” Cliff Avery said. “We can assist ESDs with educating them (voters), but they can’t influence.”
The Averys believe a successful sales tax election leads to better equipment, better tools and better response, which is a win-win for fire fighters and those they serve.
“As long as you can explain they’re getting their bang for the buck, they (voters) generally come around,” Clay Avery said.
Lincoln said the ESD has earmarked $30,000 for educational material related to the sales tax election. Broken down, it comes to about $10,000 for legal paperwork, $10,000 for consulting and another $10,000 for advertising and publications.
While the ESD hopes for a successful tax election, Lincoln admits there is no “plan B” if it fails.
“The need to grow is not going to change,” Lincoln said. “It may slow down the pace in which we can grow. If there is not a funding source you may still do it. What you thought would happen in one year might take four or five years because then you’re solely relying on property taxes.”
The ESD plans years ahead and that vision calls for projections of multiple fire stations. Whether the money available matches the strategic plan is another matter and is what determines progress and timeline.
“We’re not a for-profit organization, but it takes money to open these fire stations,” Lincoln said. “We’re already covering these areas. It’s just a matter of how many improvements we can make.”
Voters who reside within the City of Liberty Hill are not eligible to vote in the ESD election, which accounts for less than 1 percent of voters within the district.
Other ESDs in same boat
Burnet County ESD #4 held a successful sales tax election in May. This was after a failed election last year.
“We had a rough time. This was our second time,” Bertram Fire Chief Bobby Huffstuttler said. “The first time it failed miserably. The people weren’t educated enough.”
He said several people stopped by the fire station last year to tell fire fighters they wouldn’t vote in support of a sales tax because they didn’t want their property tax raised.
Bertram did things differently the second time around.
“We sent out a letter to every resident explaining what it was and that it’s not a property tax. It was our way to inform and educate the public,” Huffstuttler said. “Once the public gets educated on what it really is they’ll see it’s really needed.”
Similarly to Liberty Hill, Huffstuttler believes a 10 cent property tax cap is not enough to cover the emergency needs in the area.
“We just educated the public with our mail out and word of mouth spread real quick,” he said.
Huffstuttler is convinced the election passed the second try because voters were educated. The ESD utilized mail outs as well as social media to get and keep the word out about the election and what it was for.
They did not contract for services deciding they could reach out to voters themselves.
“We were considering it,” Huffstuttler said. “There are some services that are very good at advertising. In a large area that may be something to consider, but we thought we could do it by word of mouth.”
The Bertram ESD should start seeing $6,000 more in revenue as a result of the successful election. The additional funding will be used for updated training and updated equipment.
Williamson County ESD #3 Commissioners are considering approving a proposal for a sales tax election to be held next May. Hutto Fire Chief Scott Kerwood said it is still in the planning stages.
“We are going to look at the same thing,” Kerwood said. “We are at the 10 cent max tax rate. As an ESD we can’t raise property tax. If they’re successful in coming up with sales tax it would allow additional funding for a fire station and equipment for a fire station.”
Like Liberty Hill, residents within Hutto city limits would not be eligible to vote.
While Kerwood could not say if the revenue would be used for a new fire station or where that fire station would go exactly, he did say the greatest need is for a fire station south of the railroad tracks.
Commissioners of the WCESD #4 called the election in a 4-1 vote on Aug. 17.
“In order for our growth to stay up with demand I think we really need to do this,” said Board President Sandra Taylor. “If this passes it will set us up in order to back off on the property tax next year and then that way we could continue to grow and get our station in and then start preparing for the next one.”
Secretary James Crabtree disagreed saying ad valorem tax will cover funding needed to keep up with demand. He expressed reservations about charging people a higher sales tax.
“I’m not in favor of raising sales tax. I’m not sold on it,” he said at the time. “I think there’s a way to keep with the growth if we kept it (the ad valorem tax rate) at 10 cents. Home appraisals are going to keep going up.”
Voters will have the final say on Nov. 3.