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Funding Fire Services

By Paige E. Sansone, CPA, Partner, May 04, 2017

Are you struggling to fund fire services?   It happens throughout the state, and the consequences of insufficient funding can indeed pose dangers to life, health and property.

There are five options for funding fire services:

  1. Fund fire services out of current available revenue.  If you are a city or town, you have a general fund and a cumulative capital development fund for capital expenses.  If you are a township fire service, you have a fire fund, plus a cumulative fire fund for capital expenses. In all of these instances, you are constrained by a maximum levy and rate limitations.  If you’re already at the maximum and limit and that’s insufficient, you will need additional sources.
  1. Extend your tax base.  If a neighboring area does not have a full-time paid department and your Township fire service is currently providing (or will provide) fire services to that area, you can gain net assessed value by extending your tax base. More net assessed value to tax brings in more money at the same tax rate and, if requested, the Department of Local Government Finance (DLGF) may approve a modest increase to the fire maximum levy.
  1. Enact a Public Safety Local Income Tax (LIT).  A public safety LIT can be adopted to cover certain budget items: firefighting and fire prevention systems; emergency ambulances and emergency medical services; communications systems or enhanced emergency telephone systems; and pension payments for police officers, firefighters, sheriff department employees and others providing public safety services.  In counties that adopted County Adjusted Gross Income Tax (CAGIT), the public safety LIT must be enacted by the County Council.  In counties that adopted County Option Income Tax (COIT), the public safety LIT must be enacted by the Local Income Tax Council. 
  1. Fire Service Consolidation (Territory or District).  Forming a Fire Protection Territory or District spreads the cost of fire services over a larger tax base, provides for a uniform tax rate for those served, and may improve efficiency and reduce response times. In addition, Fire Territories and Districts have the ability to levy a separate property tax levy to fund fire and emergency medical services.
  1. Fire Protection Territories and Fire Protection Districts are not the same. They are governed by different statutes and are established using different procedures. The main difference between a Territory and a District is that a Territory is governed by the participating units and a District is governed by the County Commissioners.

If you have questions or need help analyzing the advantages and disadvantages of various solutions to increase revenue for your fire protection services, please contact us at .(JavaScript must be enabled to view this email address).

Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at


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