Other Taxing Issues - Ambulance District
written for the Warrensburg Free Press and substantially published in its initial issue, 3/28/02
As a libertarian, I dislike government meddling in the marketplace. However, those at the local level must live with the effects of meddling by state and federal governments. The rules and reimbursement rates established by these entities make it virtually impossible for any ambulance service, whether government or commercial, to operate without a local subsidy. Since the last commercial ambulance shut down, the subsidies have come from Warrensburg and Holden operating budgets. The reason an “emergency” now exists in Warrensburg is because city management refused to believe they could not operate profitably, thus delaying the eventual push toward an ambulance district by several years and wasting their cash reserves. Whether the cities have fairly stated the amount of their ambulance deficits may be open to question, but there is no doubt that they have real operating deficits in this area.
The ambulance district would be governed by six commissioners elected from subdistricts within the county (RSMo 190.050). Each commissioner is required to represent an approximately equal number of county residents and a reasonably compact area of the county. This means that Warrensburg residents will control at least two of the six seats. These commissioners will determine the exact amount of the tax levy, up to the maximum 30 cents allowed by statute. The amount generated by the maximum levy would be about twice the amount of deficit currently reported by the two cities. However, the cities claim that they are not staffing their services at optimal levels.
The tax implications are pretty complex. Currently, property taxes are the only statutorily authorized means to fund an ambulance district. People in Warrensburg and Holden as well as those in rural areas will pay the tax. The tax increase will apply to all real property (land and improvements) and taxable personal property (notably cars, boats, mobile homes on rented land). Business property is normally taxed at higher percentage of market value than non-business property, so it is reasonable to expect that these taxes will be passed on to customers in the form of price increases.
What will happen if the issue passes? First, the county commission will pass an ordinance setting out the districts. In June, voters will elect the ambulance commissioners, who they will follow prescribed procedures to set a levy and decide who performs the service. They may contract with the Warrensburg & Holden services, hire a private contractor, select some other governmental entity such as the Western Missouri Medical Center or a rural fire district) or decide to run it themselves. The general assumption is that they’ll contract with the cities unless the cities jack up the prices to an unreasonable level. While nobody can now promise what the ambulance board will do, most voters appear to be assuming that the cities will continue to operate the ambulances.
There are certain advantages to contracting with the cities. The cities can use dual-qualified responders (fire-medical) allowing a great deal more flexibility and assuring a better chance that a qualified team will be available; furthermore, the ambulance board would not be saddled with administrative costs associated with personnel management. The ambulance board could either establish detailed specifications or do a straight reimbursement of costs. The former appears to be more palatable since it would provide standards for service and would remove the temptation for accounting chicanery.
What will happen if the issue fails? Warrensburg and Holden have stated that they believe they have little choice but to discontinue service outside their city limits. If that were to occur, they would continue to support the city residents and non-residents who had the fortune to have their medical emergency within the city limits; even city residents would not be supported should the emergency happen 10 yards outside the city. In such cases, the sheriff’s department, highway patrol, and perhaps the local fire district would show up as first responders, but without significant medical training. Air ambulances would be called in as necessary, as they are now, but more frequently and with greater expense. In situations where timeliness of advanced medical response would be critical, the ill or injured would have a lesser chance of survival.
There are other options to continuing rural service if a county-wide district fails. Warrensburg can always try a general revenue sales tax to make up their deficit. This would be fair to residents and non-residents, since Warrensburg controls most of the retail tax base in the county – country folks shop at Wal-Mart and Jackson’s Appliance, too. Holden would not have that answer, since it does not have retail sales comparable to its service area. Perhaps in that case, the western part of the county could create its own ambulance district.
Should the district pass, I see certain dangers in awarding contracts to the cities. I have in letters to another paper pointed out questions in the allocation of costs in the Warrensburg city budget. Unless the contract is for a fixed price with a fixed level of service, there will be a temptation to reallocate costs from fire protection to the ambulance service, with the knowledge that the ambulance board has over $1 million taxing authority available. On the other hand, there is a tendency by commercial firms to try to “buy in” a contract by bidding unusually low and then asking for increases later. In any case, the board would need to establish definite performance requirements rather than give the cities carte blanche to run the operations.
Supporters of the ambulance district need to ensure that several things are accomplished before April 2nd if they want sell the issue to the voters. The most critical information is to show the levels of service projected with and without the district, inside and outside the cities. It would help if the county commission would announce how it intends to set up the ambulance board subdistricts, so Warrensburg’s influence can be judged. Finally, some “guide specifications” need to be provided so we can see what level of service we’re voting on. People of this county have a record of rejecting “pig in a poke” proposals, especially when the price tag is amorphous, so it behooves ambulance district supporters to be very open and specific.