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Fire District Merger: Heads up Bremerton taxpayers

May 20th, 2011 by Chris Henry

Here we go again. Every time a city fire department merges into a fire district, the question comes up whether city residents taxes will go up (beyond the annual 1 percent increase in total tax collection allowed by law). The answer is a definite maybe.

The proposed merger is far from a done deal, but the committee that’s been tweaking the plan to make it happen will present it for public comment in early June. Depending on the response from Bremerton and South Kitsap residents (and unions representing both districts) the committee Bremerton City Council and South Kitsap Fire District Commissioners could decide to put the merger on the November ballot (story up on website later tonight).

If voters approve the merger, nothing about how South Kitsap residents are assessed for fire protection will change. The rate will change as a result of the allowed 1 percent annual increase in total assessment allowed by law. But that would happen with or without the merger.

But if the merger goes forward, Bremerton property owners would be charged a new fire levy tax, based on South Kitsap’s rate, and the amount of city property tax would be reduced accordingly.

Many factors play into the maximum property tax levy rate a city can receive. Other rules affect maximum rates for other types of taxing districts, including fire districts. The interplay of maximum levy rates can result in a city gaining the capacity to increase taxes beyond the 1 percent without a vote of the people. Bremerton is not currently at its maximum rate, so technically that possibility already exits.

According to Kitsap County Assessor Jim Avery, it is also true that a fire district merger could increase that taxing capacity, resulting in a “bonus” capacity. Even if the council chose not to impose the tax increase, they could “bank” the capacity, which could be used in the future.

In fact, said Avery, it is likely this scenario would play out, as it did when the city of Port Orchard merged its fire department with South Kitsap Fire and Rescue, and when the city of Poulsbo merged with North Kitsap Fire and Rescue … and when Port Orchard’s library was folded into Kitsap Regional Library’s district.

In the last case, the current city council agreed not to use its bonus capacity, so that the net result to taxpayers was an equivalent payment. Bremerton City Councilman Jim McDonald, not speaking for the whole council, said he would support a similar approach should the fire merger give the council additional taxing power.

Council president Will Maupin said the council has not received enough information on the tax implications for him to be able to say what their response would be. The council does support the concept of the merger, Maupin said.

The take-away from all of this for Bremerton taxpayers is that it’s likely the merger would affect the city’s levy rate in such a way that would gain bonus taxing capacity. But, they already have the ability to raise taxes beyond the 1 percent annual increase. They haven’t done so in recent years. Like most governments, I’m guessing, they’re responding to the prevailing anti-tax sentiment. Would future councils take advantage of that capacity? Like seemingly everything having to do with predicting tax rates, the answer is a definite maybe.

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3 Responses to “Fire District Merger: Heads up Bremerton taxpayers”

  1. Bob Meadows Says:

    This isn’t correct, because the city council and the fire district commissioners would decide whether to place the measure on the ballot: “… the committee could decide to put the merger on the November ballot….”

    This isn’t correct, because the city’s maximum statutory tax rate will probably leave room for what Avery calls a “bonus” tax increase: “…Bremerton property owners would be charged a new fire levy tax, based on South Kitsap’s rate, and the amount of city property tax would be reduced accordingly.” In other words, the city’s levy probably won’t be forced down by an amount equal to the regional fire authority’s levy.

    This isn’t correct, because the City of Bremerton is already at its levy lid, therefore needs a voter-approved lid lift to increase by more than one percent plus new construction: “But, they already have the ability to raise taxes beyond the 1 percent annual increase. They haven’t done so in recent years.”

  2. Bob Meadows Says:

    The first regular levy (not including any EMS levy) by the regional fire authority would be set in the fall of 2012 for collection in 2013. Like the KRL levy within Port Orchard after Port Orchard annexed into the library district, there’s a one-year delay, because the levy for 2012 is based on boundaries of taxing districts as they existed on August 1.

    Port Orchard’s city council will first decide whether to take advantage of any “bonus” levy capacity resulting from annexation into the library district when they set the city levy this fall for collection in 2012.

    Bremerton’s city council would first decide whether to take advantage of any “bonus” levy capacity resulting from forming a regional fire authority when they set the city levy in the fall of 2012 for collection in 2013.

    If the total assessed values decline for taxes due in 2012 by 3%, and do the same for taxes due in 2013, the levies for KRL, the regional fire authority, and the City of Bremerton would be in this “ballpark”:

    KRL levy tax rate 0.383977 per $1000
    Fire levy tax rate 1.391577 per $1000
    Subtotal: $1.775554 per $1000

    Bremerton’s maximum statutory tax rate for 2013 would be $3.825 minus the actual tax rates of KRL and the regional fire authority, or
    $2.049446 per $1000, which would collect about $5.3 million.

    The regional fire authority levy would collect about $3.6 million from taxpayers in Bremerton.

    If the city council takes as much as they can in the city’s regular 2013 levy, city residents would pay a total of about $9 million to the city and the fire authority.

    Their city levy in 2012 will be about $6.5 million, so city residents would pay about $2.5 million more in 2013 than they will in 2012 as they begin paying the regional authority’s levy and continue paying the city levy. The city levy would be forced down, but not by an amount equal to the fire authority’s levy. The city council could decide to reduce the city levy more than they are required by law to reduce it.

  3. Sharon O'Hara Says:

    What is the benefit of the merger – beyond probable higher taxes – for the Bremerton property owner?
    If no benefit, what is the purpose?
    Will more water be available to fight the fire?
    Faster response time?

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