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.