The Montgomery County Emergency Services District 10 has placed a proposition on the May 10 ballot that will increase the sales and use tax by one percent within the district to help better fund the Magnolia Volunteer Fire Department.
The fire department is funded through ESD 10 and residents who live within the district pay 10 cents per $100 of property valuation, which is used to fund ESD 10. Due to state law, funding is capped at 10 cents, so the MVFD has no way of increasing funding except through an increase in the sales and use tax, MVFD Fire Chief Gary Vincent said. The one-percent increase in sales and use tax will go toward helping fund the fire department, and the department can use those revenues as it sees fit.
"Our biggest need right now is more firefighters to man our trucks and stations," Vincent said. "The money generated from this proposed increase in the sales and use tax will go to hiring more part-time and volunteer firefighters. We have six fire stations and three under construction. We only have enough manpower to staff four of those stations full time."
Texas state law caps sales and use tax at 8.25 percent, Vincent said. Both the city of Magnolia and the Westwood Magnolia Parkway Improvement District have a sales and use tax of 8.25 percent and will not see an increase in sales tax as a result of the proposition. All other areas within ESD 10 have a sales and use tax of 6.25 percent and, if passed, the proposition will raise those rates to 7.25 percent.
"The increase in sales and use tax will only apply in areas within the district where there is room under the cap and will not apply in areas that are capped," he said.
The MVFD is growing at a rate of 3 percent a year, but the population within the district is growing at a 5 percent rate and the fire department has seen a 42 percent increase in emergency call volume, according to ESD 10. In 2012, the MVFD responded to more than 4,000 emergency calls and that number increased to more than 5,500 in 2013. Vincent said these calls are responded to with only 16 firefighters on duty each day.
Vincent said the additional funding is needed because the staff of the department cannot keep up with demand in the region as a result of recent growth. With more growth expected to come once transportation projects are finalized, Vincent said the department will be ill-equipped to handle it.
The department has added new trucks and is building new stations to provide better fire coverage in all areas and to improve its ISO rating, which helps keep insurance premiums low for the community. Adding more firefighters aids the department in further improving its ISO rating, he said.
"We are trying to get more firefighters on the trucks to offset an increase in fire insurance," he said. "Residents are either going to pay for a better fire department or for better insurance, and it's much cheaper to pay for a better department."
If the proposition is passed, however, it would have an adverse affect on cities and municipalities looking to grow and expand, Magnolia Mayor Todd Kana said.
"This proposition, if passed, will completely cripple the city from this point forward in terms of getting a big-box store and future annexation," he said. "We have deals on the table that will be crippled if this passes. It basically destroys any future growth or expansion for the city of Magnolia."
Sales and use tax revenues account for about 75 percent of the city's budgeted revenue, Kana said. In areas outside the city limits, but within the city's extraterritorial jurisdiction, the tax rate is 6.25 percent as opposed to 8.25 percent within the city limits.
If a business wants to build outside the city limits, but within the ETJ, the city will provide it with water and sewer utilities in exchange for annexing the business to the city. If annexed, the city would be able to collect an extra 2 percent of sales and use tax revenues from the business, which covers the cost of providing utilities and adds more revenue to the city's budget, he said.
"There will be no reason for the city to expand its limits if the ESD is taking half of the available sales and use tax revenues," Kana said. "If the possible revenues from any future deals are cut in half, then it does not offset the cost of providing utilities and puts the bill solely on the city. We need all those revenues to offset the cost of providing utilities and eventually increase the city's revenues."
Kana said he knows MVFD is in need of more manpower, but it should go about finding money in a way that will not stifle the growth of Magnolia.
"This proposed tax is extremely scary for the city and basically devastates every city in the ESD," Kana said.
