Benefit Charge: Stabilizing Funding for Fire & Medic One
Demand for Graham Fire & Rescue/Fire District 21 services is growing; service calls have increased 40 percent since 2010. Currently, nearly all of our funding to provide fire and emergency medical response services comes from voter-approved property taxes. Regular property tax revenue can only increase by 1 percent each year (plus the value of taxes on new construction)—as required by state law. However, the cost of our operations typically grows by more than 1% each year. To address this gap between revenues and expenses, to reduce reliance on property taxes and to provide more stable funding to meet the needs of our growing service area, the Fire Commissioners have proposed a Benefit Charge on the November 2020 election. A Benefit Charge is a fee (not a tax), that is designed to allocate costs based on the fire risk created by different types of buildings.
Washington statute RCW 52.18 provides that fire districts, with the approval of the voters in their district, are authorized to collect a benefit charge from residential and commercial property owners. Once the benefit charge collection is authorized by the voters, the normal tax collection rate authorized by State Law, drops from $1.50 per thousand to $1.00 per thousand of assessed value.
To request a presentation, information or a question about how a benefit charge would impact your specific property, please email BenefitCharge@GrahamFire.org
Presentation from the Fire Chief: Benefit Charge
- July 14, 2020 Benefit Charge Public Hearing Presentation
- July 24, 2020 Voters will decide future funding for Fire Service
Benefit Charge FAQs
Graham Fire & Rescue/Fire District 21 provides fire and emergency medical services to nearly 67,000 residents, businesses and properties within its borders. “Fire Protection Districts” (Fire Districts) are independent municipal corporations that are authorized and governed by state law (Title 52 RCW) and are accountable to voters in their district.
Graham Fire & Rescue serves people throughout 70 square miles of south central Pierce County, including the communities of Frederickson, Spanaway, South Hill, Graham and Kapowsin. 97 dedicated firefighters and emergency service providers work out of the six fire stations located in the district.
The growing Graham Fire & Rescue District has seen a significant increase in service calls over the last decade. In 2019, the agency responded to 7,323 calls for service—over 40 percent more than in 2010.
Graham Fire & Rescue recently received an improved rating from the Washington State Surveying and Rating Bureau, putting the fire district in the top 10% of fire departments rated in Washington. This improved rating means lower fire insurance premiums on homes and businesses.
Property taxes—based on assessed value of buildings and land—are currently the primary revenue source. Different levies and other non-tax revenue sources also provide funding. Levies include:
- Regular Tax Levy: Fire Protection Districts may levy up to $1.50 per $1,000 assessed valuation.
- Emergency Medical Service Levy: Fire Protection Districts may also levy an additional $.50 per $1,000 assessed value to provide emergency medical services.
- Excess Tax Levy: Levy that exceeds the $1.50 regular tax levy limits. In 2018, voters approved a four-year (2019-2022) Maintenance & Operations (M&O) to hire 18 new firefighters, recruit/train 14 volunteer firefighters and buy a second water tender.
2020 Graham Fire & Rescue Property Tax Rates
Fire Levy: $1.45 per $1.000 of assessed value (max rate = $1.50)
EMS Levy: $0.50 per $1.000 of assessed value (max rate = $0.50)
Excess Levy: $ 0.53 per $1.000 of assessed value
All levies are voter approved.
A Benefit Charge (BC) is a funding option available to Fire Districts to pay for fire and emergency service operations. Unlike property taxes, a BC is a fee, not a tax. With voter approval, a BC replaces a portion of the property tax that a Fire District otherwise collects.
A BC is calculated based on required firefighting resources, the size of the building(s) on a property and the hazards associated with those building(s). A BC transfers more of the Fire District’s operating costs to buildings and facilities that require more resources to respond to a fire event.
In contrast, when a Fire District levies a property tax, it is based on the assessed value of buildings and land, and does not take into account needed resources, building sizes or associated hazards.
Under a BC, larger, more complex structures which require a larger, more complex fire response, generally pay more. And single family residential and small commercial properties, which require a less complex fire response, generally pay less.
Low income seniors, low income persons and persons with disabilities that qualify for property tax exemptions also qualify for a BC exemption. Religious institutions and buildings, including religious schools, nonprofit and public housing for low income residents, seniors and persons with disabilities and vacant land and/or parcels with structures under 400 square feet are also exempt.
A Benefit Charge (BC) will provide financial sustainability and stability by diversifying revenues to include both property taxes (at lower than current rates) and the BC, as well as fees for service and state grants. Unlike property taxes, a BC can be adjusted annually to address Fire and EMS costs during a recession or period of high inflation.
Under state law, total property tax receipts collected by Fire Districts can only increase one percent from year to year, plus the value of taxes on new construction (this is true for all local governments in the state). However, costs of firefighter salaries, benefits, fuel and equipment replacement often go up by more than one percent per year, creating a gap between revenues and expenses. A BC can help cover these gaps and reduce the frequency with which a Fire District must seek voter approval for property tax increases.
A BC will also shift costs to structures that require more fire service. For example, complex structures with on-site hazards pay more than simple, non-hazardous structures of the same size and property value.
Finally, demand for Graham Fire & Rescue services is increasing, with a 40 percent increase in calls since 2010. A BC will allow the Fire District to maintain existing service levels as the community’s needs continue to grow and change.
Yes. If voters approve a Benefit Charge (BC), Graham Fire & Rescue will lower its property tax rate from $1.45 to $1.00 per $1,000 assessed value. In addition, the Fire District plans to stop collection of the voter approved 2019-2022 Maintenance and Operations (M&O) Excess Levy two years early—in 2021—as the BC will replace that revenue.
The total amount of revenue a property owner will pay each year will depend on:
- the value of their land and buildings subject to property tax,
- the type of improvements on the property, and
- whether/how those improvements are subject to the BC.
The combined tax and BC cost for any property owner will depend on the value of their property and the nature of the improvements on the property. For some properties, the net cost will be higher; for others, it will be lower.
Under a BC formula, all properties in the Fire District will fall into one of four categories based on data from the County assessor. Each category will be charged differently. Properties at higher risk for a fire, and those that use, process or store hazardous materials will pay more than properties without such hazards (residential gas stoves are not considered a hazard).
Benefit Charge Categories
|Residential||Mobile Home Park Units|
|Multi-Family Buildings||Commercial Buildings|
Generally, residential and mobile home properties will pay less and multi-family and commercial businesses will pay more than they do under the current property tax funding structure.
There are several exemptions under state law that apply to the benefit charge: Religious institutional facilities (churches, schools), nonprofit and public housing for seniors, low income residents and persons with disabilities, and vacant land and/or parcels with structures under 400 square feet are all generally exempt from the payment of a benefit charge. In addition, low income persons that qualify for exemptions from all or a portion of property taxes may also qualify for an exemption from a portion of the Benefit Charge.
Implementing a BC requires 60 percent voter approval initially. If approved, the BC is in place for 6 years, at which point voters must again decide whether to extend it. A 6-or 10-year extension requires simple majority voter approval; a permanent extension requires 60% voter approval.
If approved, the BC would start in 2021.
Yes. State law caps the total amount of revenue that can be collected through a Benefit Charge (BC) to no more than 60 percent of the Fire District’s total operating budget. The remaining operating budget must be secured through other means such as property taxes, fees, grants, etc.
Typically fire agencies do not come close to the 60% threshold for a BC. Graham Fire & Rescue is proposing a financial plan for the BC to cover approximately 25% of the total operating budget.
Each property owner subject to the Benefit Charge (BC) will pay this fee the same way they currently pay property tax—through mortgage payment or Pierce County Assessor bill. Graham Fire & Rescue will send an annual notice of their BC for the following year to each property owner by early December.
Once the Benefit Charge (BC) is set and written annual notification is provided to each property owner, an annual appeals process is required. Graham Fire & Rescue will establish a review board to hear and rule on any written complaints submitted. If voters approve a BC in November 2020, the first appeals process will take place in December 2020. Appeals can be submitted in person, online or over the phone.
If a Benefit Charge (BC) is not approved, the combined fire levy authorization will remain at $1.50 per $1,000 of assessed value (this does not include the additional EMS levy authorization) and the voter-approved Maintenance & Operations levy will remain in place for its full term through 2022.
As demand for service and operation costs rise, Graham Fire & Rescue will have to address budget gaps by seeking additional property taxes and/or changing how services are delivered.
Voters approved Benefit Charges (BC’s) in seven other fire agencies in central Puget Sound: Central Pierce Fire & Rescue, Puget Sound Fire Authority, Valley Regional Fire Authority (Auburn), Renton Regional Fire Authority, King County Fire District 40, Duvall-King County Fire District 45, and Woodinville Fire & Rescue.