Business tax to skyrocket
Midway Fire District's tax referendum may cause increases of more than 300 percent
BY LISA NEWELL Gulf Breeze News lisa@gulfbreezenews.com

On Jan. 29, voters who live in the Midway Fire District will have two initiatives on their ballots. In addition to the Additional $25,000 Homestead Exemption, those voters will also determine whether or not to increase the funding for the Midway Fire District.

Currently, Midway Fire District collects approximately $2.8 million per year to provide fire protection and first responder services to the area eastward from the Tom Thumb store east of the Naval Live Oak preserve to 100 feet short of Edgewood Drive in the Holley by the Sea subdivision and north to the 6500 block of East Bay Blvd.

Businesses, which are not subject to homestead exemptions, face skyrocketing costs in fire tax if Midway's proposal passes Jan. 29.

Currently, businesses are assessed a fire tax of 1.4 mills, but many will see those rates jump as they will also be assessed 38 cents per square foot.

Wal-Mart in the Midway Fire District is an example. Currently, the 187,352 square foot building is assessed $14,910.62 per year for fire protection. Under the new plan, if approved, the fire tax will increase 425 percent to $76,000 per year. Contrast that with the Wal-Mart on Highway 90, which will pay an unchanged rate of $5,494 per year.

Additionally, the fire tax would be subject to increases each year based on the annual growth rate in Florida personal income for the previous five years. Also, as property values go up, should the district maintain the same millage rate then their revenue will go up and is an increase in property taxes.

Midway Fire District Treasurer Clyde Broome said the figures he came up with for annual growth rate in Florida over the past five years to average 4.5 to 5 percent.

Nels Offerdahl owns movie theatres in both the north and south ends of the county. His Gulf Breeze business, Breeze 8 Cinemas, is roughly the same size and value of The Ridge Cinemas in Pea Ridge. However, the Gulf Breeze business pays $4,088.91 in fire tax inside the Midway Fire District, and if the proposal passes, will pay $16,034.54, provided the district reduces its millage as promised. His Pea Ridge business pays only $1,017.47 in fire tax.

"I certainly wouldn't vote for it," Offerdahl said of the proposal. "I can't take that kind of hit."

Broome said it isn't fair to compare Midway Fire District with other non-professional districts.

"It costs more money to have two districts with eight people on staff, minimum, 24/7," Broome said. "You can make the comparisons, but [some of the other fire districts] have no paid employees, no medical services... we went to the voters in 2003 and they said they were willing to pay the additional money to get better service," he added, hoping voters will approve the new increases on the Jan. 29 ballot.

If the Additional $25,000 Homestead Exemption passes, Broome says it will affect the way the Midway Fire Department collects its operating funds, reducing the amount by approximately $225,000 the first year. Currently, the district collects ad valorem taxes on the assessed value of the home.

If the referendum passes, the district will increase collections by 63 percent, even if they roll back the millage rate as they promise, because the fire tax must be used only for firefighting and not on any medical services the district provides. They are not bound by any law to reduce the millage rate, however.

Midway Fire District is a special taxing entity established by the Florida legislature in the early 1980s as are the Avalon Fire and Holley Navarre Fire Districts inside Santa Rosa County.

Broome said the district needs to "front load" its coffers to pay for expansion in the district, including adding a new fire station on land it currently owns a quarter of a mile east of the Community Life Center. When built, it will need to be fully manned and have equipment.

Currently, the district is in debt for both stations, a ladder truck and the commercial property, but Broome said they are well below the 50 percent level state law limits in loans to revenue.

The Santa Rosa Property Appraiser said they were not aware of the details of Midway Fire District's referendum, except for a Dec. 12 letter.

Property Appraiser Greg Brown said, "They haven't contacted us about calculating any taxes for them. We didn't even know the rates, so we couldn't give them any numbers." He learned about Midway Fire District's ballot language from the article in the December 20, 2007 issue of Gulf Breeze News.

If approved, the new assessments would be figured as of Jan. 1, 2008 and appear on the November tax bills.

But even if the district's referendum passes and the board rolls back the millage rate according to the plan, it still stands to increase its funding from $2.8 million per year to $4.6 million overnight.

The district also collects impact fees on new construction, $245 for a residence and 33 cents per square foot for commercial construction.

Midway Fire Chief Stephen Demeter said there is a limit of 75,000 square feet on commercial property, which would affect the "big box" stores such as Wal- Mart and Lowe's but not smaller businesses.

"If voters approve the referendum, we're going to apply it to the full level of the law. If there's no cap mentioned in the referendum, we can't assume anything," Brown said.

Next week: part two