Fire merger to be costly, tax watchdog charges

The Daily Star
July 31, 2008
Lourdes Medrano

The Phoenix-based Arizona Tax Research Association has come out in opposition to a plan that will merge La Cañada, Heritage Hills and North Ranch/ Linda Vista fire districts.

The districts say the merger will keep area residents' property taxes low, but the organization contends the move will do the opposite — raise taxes.

At issue is the fire district assistance tax, or FDAT, the fee all Pima County property owners pay for fire protection.

The three districts have agreed to raise tax rates to maximize the amount they are eligible to receive in FDAT money, said association president Kevin McCarthy.

FDAT funding to an individual fire district is capped at $300,000, but the limit does not apply to merged districts, he said. In 2008, the combined FDAT for the merged districts is expected to be $900,000.

The three fire districts are abusing the system, he said.

"What bothered us was when we found out what the districts were doing — I think largely led by La Cañada — to leverage a dramatic increase in the fire district assistance tax by a huge tax increase that they're planning for this year," McCarthy said.

Two years ago the Arizona Tax Research Association supported legislation that allowed such mergers on a unanimous vote of each board, he noted. But the association intends to lobby for new legislation to keep merged districts from exceeding the $300,000 cap, McCarthy said.

Mike Treece, board chairman of La Cañada Fire District, said there is nothing illegal about the planned merger.

"We are working within the law, and we are doing what's legal, and we are doing what's smart," he said.

Earlier this month, the districts set rates for next year's secondary property taxes, which help fund new stations.

Residents of Heritage Hills Fire District will pay $1.90 per $100 assessed value, up from $1. In North Ranch/Linda Vista Fire District, residents will pay $2.07 per $100 assessed value, up from $1.22. La Cañada Fire District residents will still pay $1.25 per $100 assessed value.

After a year, the tax rate will be $1.25 for all three districts, where it is expected to stay indefinitely, Treece said.

Mary Schuh, board member and treasurer of the Pima Association of Taxpayers, said her organization has not taken a stance on the merger.

"I can understand the reason for wanting to merge," Schuh said of the three fire districts. "I think they're trying to protect themselves and really keep local control."

Schuh, who lives on the Northwest Side but outside the three districts, said she also sees the association's side.

"I can understand how they feel that there hasn't been full disclosure to all the taxpayers."