Menlo fire district looks at parcel tax measure for November ballot Menlo fire district looks at parcel tax measure for November ballot (March 24, 2004)

** As state threatens to withhold more local tax revenue, Menlo Park district may ask voters to raise their taxes.

By Renee Batti
Almanac News Editor

Eleven years after overwhelmingly approving a parcel tax that ultimately was never put into effect, voters in the Menlo Park Fire Protection District are likely to be asked again to give the fire district the option of increasing their taxes for fire-safety and emergency-medical-response services.

The district's board of directors will discuss the possibility of putting a parcel tax of a yet undetermined amount on the November ballot when it meets on April 20.

"I see this as a contingency plan," board member Peter Carpenter said at the board's March 16 meeting. "It's the prudent thing to do. We've got to look at options" to continue providing an acceptable level of service even if the state takes a bigger bite out of local property tax revenues next fiscal year (beginning July 1), as it is threatening to do, he said.

District officials are concerned about current proposals in Sacramento that would short the district a total of $1.4 million in property tax revenue in fiscal year 2004-05. The money would be given instead to schools. Even without that $1.4 million loss, the district is anticipating a $1 million deficit next fiscal year.

The proposed new tax shift would be in addition to the approximately $2.2 million the district already loses annually because of the Educational Revenue Augmentation Fund (ERAF) maneuver the state put in place in 1992, when it was facing another recession.

Gov. Arnold Schwarzenegger's proposed budget calls for using the ERAF maneuver to shift still more money from cities, counties and special districts to the schools, and that proposal would mean an additional cut of $550,000 for the fire district, according to Fire Chief Paul Wilson.

After the governor released his proposed budget in January, the legislative analyst's office indicated that more of a tax shift would be needed for the schools, and under the analyst's plan, the district's loss would total $1.4 million, Chief Wilson said.

Since 1992, the ERAF shift has reallocated local property tax revenues from cities, counties and special districts to help cover the state's share of school funding. It's estimated that, statewide, about $4 billion annually in local property taxes now goes to ERAF, according to Cory Jasperson, legislative aide to Assemblyman Joe Simitian, D-Palo Alto.

In June 1993, when the fire district's budget was ailing and officials were uncertain about how hard the district would be hit by the first ERAF shift, it put a $1.8 million annual parcel tax on the ballot. "We didn't know what the financial impact (of ERAF) would be, and we were going to use it as a fail-safe," said board president Ollie Brown, who at the time was part of the fire district's staff.

The measure passed, but "the economy turned around," and the district decided not to use the authority given to it by voters to raise taxes, he said.

Chief Wilson said the district might be able to handle the $550,000 loss that it faces under the governor's proposal without drastic cutbacks in services, but if the full $1.4 million is taken away, it's likely that a fire station will be closed unless more revenue is found.

Although four of the five board members directed Chief Wilson to present parcel tax options at the April 20 meeting, board member Del Krause warned that he would not support a ballot measure. "I don't favor tax increases to bail (the state) out," he said.

Mr. Krause argued that the district should work to change the ERAF practice, and to find ways to cut costs, such as consolidating with other fire service agencies.

But other board members said the district must be prepared for more hits by the state, and by beginning the process now, a tax measure can be placed on the November ballot. The measure "would allow us (to raise taxes), but wouldn't require us to," Mr. Carpenter said.

Board president Brown noted that beginning the discussion now "is a proactive rather than reactive" move. He said it will get the community involved in deciding how the district should go forward in the face of an anemic budget and possible revenue losses resulting from the state's tax shifts.

If the board decides next month to put a tax measure on the November ballot, a public hearing must be held, and that is likely to be scheduled for June.

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