Sales tax rate hike possible for ESD 1

The influx of growth across the Dripping Springs area could push the Hays County Emergency Services District No. 1 to potentially look at increasing its sales tax rate.

Such a determination was reached after the ESD 1 commissioners approved its budget for fiscal year 2018. But according to a district press release, ESD 1 must bring in more revenue in the coming years to keep up with the growth.

The approximately $1.8 million budget includes $1.059 million for EMS staffing and supplies.

ESD 1 also budgeted $460,000 to remount two ambulances and purchase equipment, according the release.

Walter Krudop, ESD 1 board president, said with the district growing at eight percent each year and the volume of emergency calls increasing at 15 percent on average per year, the ESD is looking at ways to increase revenue in the future.

The expected annual expenses by 2020 are projected to grow by more than $650,000, while the annual income is projected to grow by only around $240,000, according to the release.

One of the ways ESD 1 can mitigate the projected shortfall in revenue is by increasing sales tax in the district.

The potential sales tax increase is projected for May, when the district will take the proposed increase to voters. The amount of a proposed increase will depend on further discussions.

The ESD will also look at how the recent approval of a sales tax in ESD No. 6 affects the budget and use that as a prediction for ESD No. 1’s measure.

In May, voters in ESD No. 6 approved a quarter-cent sales tax increase to fund a new fire station and other equipment. The measure was approved with 71 percent of the vote.

“We feel like the public was pretty strong in telling us last time that they didn’t want to see our [property]tax cap go up,” Krudop said. “We think the public, in voting for the fire department ESD’s sales tax, found the sales tax more appropriate than an ad valorem tax, and that’s the motivation for looking at the sales tax right now.”

Another potential revenue increase could come from an increase in property taxes. However, Krudop said that is currently not being considered

“There’s always a balance between planning for the future and staying completely out of debt,” Krudop said. “We think the public wants to stay out of debt, we know they don’t want taxes to raise, but we also know they want their EMS services to be as good as they are right now.”

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