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Fire Protection District Q & A Sales Tax

The proposed establishment of the Estes Valley Fire Protection District to provide fire and rescue services to the entire Estes Valley will go to the voters this October. Each week until the election, the Fire Services Initiative Committee will answer questions submitted by the residents of the Estes Valley. Questions are being grouped by subject. This week, the questions involve sales tax.

Q. Why do we need a Fire Protection District? Why not continue with the existing Fire Department and fund it with sales tax revenue?

A. The Town of Estes Park cannot continue to provide the projected levels of funding for the existing Fire Department and also fund other Town priorities. In addition, it cannot continue to provide Fire Department services to the Estes Valley areas outside Town limits at the Town’s expense. That is why a new Fire Protection District (FPD) has been proposed. The Fire Services Task Force believes that an equitable approach is to fund the FPD by a combination of sources. One source would represent the protection of people, as in vehicle accident response and medical emergency response. A second source would represent the protection of property, as in fighting structure fires and responding to suspicious odor incidents. The first source of funding would be “people”-based and consists of the commitment by the Town of Estes Park to contribute 7% of their sales tax revenue to the new FPD. The second source would be “property”-based and consists of the new 1.95 mill property tax levied on all property in the Estes Valley. This approach best represents a fair and equitable method of providing stable, predictable funding for fire services that benefit the entire Estes Valley.

Q. I hear you are going to raise the sales tax by 7%.

A. Not true. There will be NO increase in the sales tax rate in the proposed plan. This is a misunderstanding. In the proposed plan, the Town has committed to provide 7% of their annual sales tax revenue to the new Estes Valley Fire Protection District.

Q. Doesn’t the Town already get 7.7% from sales tax?

A. No. The total sales tax paid within the Town of Estes Park for most goods except food is 7.7%. That is comprised of 2.9% Colorado State sales tax, 0.8% Larimer County sales tax, and 4.0% Town of Estes Park sales tax. Food is not taxed by either the State or county, but is taxed by the Town. The total sales tax on food is therefore just the 4% Town of Estes Park sales tax.

Q. Can’t the entire cost of the Fire Protection District be paid by sales tax?

A. No. The proposed Fire Protection District would be a legal entity of Larimer County. As such, it cannot legally impose or collect sales tax revenue. City and Town governments can impose and collect sales taxes but county governments cannot.

Q. Exactly how much is 7% of the Sales Tax, and is that enough to run the district?

A. The projected total sales tax revenue for the Town in 2010, the first year of operation and funding of the Fire Protection District, is $7.34M. The 7% of sales tax dedicated to the new Fire Protection District is about $514,000. The total projected budget for the Fire Protection District in 2010 is just over $1.0M. The balance of the revenue required to meet that budget comes from the new 1.95 mill property tax to be assessed on all property within the Estes Valley Fire Protection District boundaries. In this way, residents and visitors to our community pay for “people” services via the sales tax, and property owners pay for their “property” through the property tax.

If you have any questions concerning the proposed establishment of the Estes Valley Fire Protection District you can email them to tanderson970@beyondbb.com.

The proposed establishment of the Estes Valley Fire Protection District to provide fire and rescue services to the entire Estes Valley will go to the voters this October. Each week until the election, the Fire Services Initiative Committee will answer questions submitted by the residents of the Estes Valley. Questions are being grouped by subject. This week, the questions involve sales tax.
Q. Why do we need a Fire Protection District? Why not continue with the existing Fire Department and fund it with sales tax revenue?
A. The Town of Estes Park cannot continue to provide the projected levels of funding for the existing Fire Department and also fund other Town priorities. In addition, it cannot continue to provide Fire Department services to the Estes Valley areas outside Town limits at the Town’s expense. That is why a new Fire Protection District (FPD) has been proposed. The Fire Services Task Force believes that an equitable approach is to fund the FPD by a combination of sources. One source would represent the protection of people, as in vehicle accident response and medical emergency response. A second source would represent the protection of property, as in fighting structure fires and responding to suspicious odor incidents. The first source of funding would be “people”-based and consists of the commitment by the Town of Estes Park to contribute 7% of their sales tax revenue to the new FPD. The second source would be “property”-based and consists of the new 1.95 mill property tax levied on all property in the Estes Valley. This approach best represents a fair and equitable method of providing stable, predictable funding for fire services that benefit the entire Estes Valley.
Q. I hear you are going to raise the sales tax by 7%.
A. Not true. There will be NO increase in the sales tax rate in the proposed plan. This is a misunderstanding. In the proposed plan, the Town has committed to provide 7% of their annual sales tax revenue to the new Estes Valley Fire Protection District.
Q. Doesn’t the Town already get 7.7% from sales tax?
A. No. The total sales tax paid within the Town of Estes Park for most goods except food is 7.7%. That is comprised of 2.9% Colorado State sales tax, 0.8% Larimer County sales tax, and 4.0% Town of Estes Park sales tax. Food is not taxed by either the State or county, but is taxed by the Town. The total sales tax on food is therefore just the 4% Town of Estes Park sales tax.
Q. Can’t the entire cost of the Fire Protection District be paid by sales tax?
A. No. The proposed Fire Protection District would be a legal entity of Larimer County. As such, it cannot legally impose or collect sales tax revenue. City and Town governments can impose and collect sales taxes but county governments cannot.
Q. Exactly how much is 7% of the Sales Tax, and is that enough to run the district?
A. The projected total sales tax revenue for the Town in 2010, the first year of operation and funding of the Fire Protection District, is $7.34M. The 7% of sales tax dedicated to the new Fire Protection District is about $514,000. The total projected budget for the Fire Protection District in 2010 is just over $1.0M. The balance of the revenue required to meet that budget comes from the new 1.95 mill property tax to be assessed on all property within the Estes Valley Fire Protection District boundaries. In this way, residents and visitors to our community pay for “people” services via the sales tax, and property owners pay for their “property” through the property tax.
If you have any questions concerning the proposed establishment of the Estes Valley Fire Protection District you can email them to tanderson970@beyondbb.com.

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