A proposed 17.6 percent jump in the tax rate for countywide emergency medical services could be the first of many such hikes unless major changes are made to the system.
Taxes would have to increase because Pinellas County commissioners have spent more on EMS (mostly on personnel costs) than they have received in tax money the past year or so. They have borrowed from savings to cover the deficit.
Even if they raise taxes this year, spending will still outstrip income for the next few years. If all else continues as is, the county is projecting that it will spend all its emergency medical service reserves by 2013. The balance in that account would read $0.
"We sort of hit the wall at that point," Pinellas County Administrator Bob LaSala said Friday. "We're at zero. … We can't keep (spending at the current rate) without a major infusion of revenue."
County commissioners are unhappy with the prospect of reducing savings to zero or raising taxes. Instead, several of them are hoping a study already under way will provide a quick way to reform the system and make it fiscally sound.
"We won't use our reserves up," commission Chairwoman Karen Seel said. "I don't think anybody on that board would zero out reserves."
Seel said the cities and fire districts, which the county pays to provide EMS service, have been good about holding costs down. And there may be other opportunities to cut costs while waiting for the results of the study, she said.
But, Seel conceded, "If we're not able to find some other cost savings in the meantime, there may be incremental tax increases to deal with the lack of revenue."
But even if the study, which should be released later this year, provides an answer, LaSala has said it's unlikely any changes would take effect for at least two years. That's assuming everyone is willing to go along with the new ideas.
Given the history of emergency medical service in Pinellas, it's unlikely that everyone will play nicely.
Soon after the current system was formed in the mid to late 1980s, the county attempted to control the costs. St. Petersburg sued. The result was a 1989 court interpretation that state and local mandates required the county to pay the "reasonable and customary" costs of the 10 cities that had services when the system went into effect.
The county interpreted that to mean paying all costs, no questions asked, and extended it to the other districts to be evenhanded. That seemed to be no problem as long as tax money was flowing. Then Amendment 1 was voted in, the real estate market crashed, and tough economic times set in.
Last year, the county again tried to control costs, and St. Petersburg threatened to sue again. The county backed down.
That leaves the county having to gingerly ask the 10 cities to play nicely rather than demand that they put brakes on costs, commissioners say. Any real reform, they say, must include some way to get a handle on this issue.
"Until we do, we're not going to get to the kind of cost savings we (need)," County Commissioner Ken Welch said.
That's the long-term goal. In the short term, LaSala and his staff have given the commissioners a way to hold the line on taxes this year. They have suggested the commission increase ambulance fees, take money from reserves, stop paying for the Squad 26 vehicle in the Pinellas Suncoast Fire and Rescue fleet, use surplus money from the cities' EMS accounts and eliminate a paramedic position from a Lealman fire station and move another from there to Kenneth City.
So far, the commission has increased ambulance fees and indicated it plans to do all except eliminate and move the Lealman paramedic positions. A 4-3 vote on the board would leave the status quo despite a county staff report that says the move would save taxpayers $451,000 with no change in service. Those four would take more out of reserves to substitute for the Lealman savings.
Yet, even with those on the table, commissioners seem unwilling to commit to a promise that when it comes time for a final vote on Sept. 21 that they will not increase taxes this year.
As it stands, the proposed increase would take the EMS tax rate from about $0.5832 per $1,000 of assessed, taxable property value to about $0.6860 per $1,000 of assessed, taxable property value.
That would increase the tax on a $150,000 home with a $50,000 homestead exemption from $58 to about $69 for the 2010-11 fiscal year.
"I think it's safe to say that we would all like to find a way to bring it down," Commissioner Nancy Bostock said. "I want to bring it down, but I don't know realistically how we can."
The way the system is set up leaves commissioners in an awkward situation. Much of the increase in costs can be traced to personnel — raises under union contracts that were negotiated by cities and fire districts during better economic times as well as the rising costs of pensions, health insurance and other benefits.
With their hands tied by the 1989 lawsuit, commissioners essentially must fund city and fire district raises when their own employees are being laid off or are going without raises.
"I do have some very inherent problems with that. Everybody has tightened their buckles and have not taken pay raises," Seel said. "I have a hard time looking at our employees and others. … It does seem unfair."
Reach Anne Lindberg at email@example.com or (727) 893-8450.