The Novato Fire Protection District board has approved an increase in parcel taxes beginning in July.
Approved in a unanimous vote this month, the new tax rate will rise from 9.16 cents to 9.51 cents per square foot for residential properties and from 13.73 cents to 14.26 cents per square foot for commercial and industrial properties.
The tax hike will bring the district another $214,000 in tax revenue for a total of about $5.8 million in the 2019-20 fiscal year, according to district staff. The district regularly increases the tax rate to keep up with inflation.
“It’s primarily to keep pace of the rising cost of doing business,” said Joe Valenti, the district’s finance director. “The cost of fuel, personnel, benefits and insurance; all the costs are going up every year.”
Originally approved by voters in 1991 to pay for ambulance, paramedic and fire protection services, the tax can be adjusted annually to keep up with inflation following an amendment to the tax measure approved by voters in 2002. The fire district is citing a 3.87% increase in the Bay Area’s consumer price index in 2018 as justification for the rate increase. This is the largest bump in the consumer price index since 2001, which saw a 5.38% increase, according to the district staff report. Adjustments have increased the tax rate yearly since at least 2013, Valenti said.
Last year, the district collected $5.58 million in revenue from the 56.1 million square feet of Novato and unincorporated land within its jurisdiction. Property taxes make up the vast majority of the district’s revenue. Within that the special assessment tax makes up about 18% of the district’s revenue, Valenti said.
The decision comes as the district board begins its review of its 2019-2020 budget.
The district budgeted for 75 employees in the current fiscal year, down two positions from the preceding 2017-18 budget. Public agencies like the district are also preparing for higher pension costs for employees as the California Public Employees’ Retirement System, or CalPERS, continues to lower its discount rate. The discount rate essentially indicates how much CalPERS investments of employer and employee pension payments are expected to earn in the future. The rate is being lowered from about 7.4% in 2017 to 7% by the 2019-20 fiscal year, which begins in July.
Fire Chief Bill Tyler said Monday that the district is in good financial shape as it heads into the new fiscal year, but said economic forecasts show property tax revenues are expected to remain fairly flat.
“While oftentimes Southern Marin enjoys higher property taxes, it’s not the same for the north end of the county,” Tyler said.
