STATE COLLEGE — Hundreds of local governments in Pennsylvania would gain expanded taxing power to fund their cash-strapped fire departments and emergency medical services under a bill advancing in the legislature.
Last year, the state legislature gave some local governments the ability to levy higher property taxes to fund fire companies and EMS providers. Now, a bill that would expand that opportunity to over 1,400 more municipalities has passed the Democratic-controlled state House.
Local governments in Pennsylvania decide how to fund these emergency services for their communities.
Governing boards can pay for these costs out of their main account, usually called the general fund, or they can set money aside using a special real estate tax and restrict that income to only fire or EMS services.
David Greene, executive director of the Pennsylvania Local Government Commission, a legislative agency, described such a dedicated property tax as a “lock box mechanism.” It “gives the public an understanding that that portion of their tax bill is going [to] and is guaranteed for that specific purpose,” he told Spotlight PA.
But for decades, state law has imposed an upper limit on how much local governments can tax property owners for these purposes: no more than 3 mills for a fire tax, and no more than half a mill for an EMS tax.
These kinds of limits have been criticized by some as arbitrary.
But that changed — to a small extent — last year when state lawmakers approved Act 54, which raised the fire tax limit to 10 mills and the EMS tax cap to 5 mills for about 150 boroughs and townships in Bucks, Delaware, and Montgomery Counties, according to a count compiled by the Pennsylvania Local Government Commission.
In Bucks County’s Northampton Township, the board of supervisors decided it was “absolutely critical” to fund a full-time fire department that is on call every hour of the day, Township Manager Robert Pellegrino told Spotlight PA.
The trouble was that the township was already charging property owners the maximum rate of a fire tax it could under state law: $3 for every $1,000 of the assessed value of a property — or 3 mills. That translates to about $1.8 million, which is less than one-third of the township fire department’s budget, Pellegrino said.
Before the tax cap increase, Northampton Township had limited options to make up the difference. It could transfer money from its general fund, which could put severe strain on other services like police, or it could raise its taxing limits through a voter referendum, which Pellegrino said is an “unsustainable model.”
Pellegrino said his township worked with state legislators on behalf of the measure. Northampton Township was one of the three local governments (all in Bucks County) that have exercised this new, higher taxing authority so far.
“It’s a huge relief and a very big help,” Pellegrino told Spotlight PA. Northampton Township is able to almost entirely fund its fire department with the new tax.
At least 855 of the state’s 2,558 municipalities impose some form of fire tax, according to a database maintained by the Department of Community and Economic Development, which includes tax information submitted by about 80% of local governments. The same dataset showed 224 local governments reported having a tax for ambulance, rescue, and emergency services.
A Spotlight PA analysis of state data found that among municipalities that have a form of fire tax, about 7.5% have reached or exceeded the cap. For those with an EMS tax, 62% have met or gone beyond half a mill.
The increases allowed by Act 54 were “a step in the right direction,” state Rep. Chris Pielli (D., Chester), prime sponsor for House Bill 393, wrote in a memo seeking support from his colleagues. His proposal would allow second-class townships in Pennsylvania — where a majority of commonwealth residents live — the same 10-mill limit for a fire tax and 5-mill cap for an EMS tax.
Pielli, a former township supervisor, told Spotlight PA that his proposal has the support of local fire and EMS agencies. He said that funding is only one aspect of the crisis facing public safety services and that additional actions in Harrisburg, like tax breaks for first responders, should be considered.
“This is a problem that requires a multipronged approach,” Pielli said.
Nearly 90% of the state’s 1,770 registered fire departments are entirely staffed by volunteers, according to the U.S. Fire Administration. A 2021 survey of Pennsylvania’s 744 certified EMS agencies found more than half of them had experienced a budget deficit, according to the Center for Rural Pennsylvania, a legislative agency.
Many local fire companies and EMS providers have sounded the alarm on funding and operational challenges.
“EMS systems are collapsing under the weight of outdated reimbursement models [and] the lack of funding to maintain 24/7 readiness and workforce attrition,” Janette Swade, executive director for the independent Pennsylvania Emergency Health Services Council, told Spotlight PA in an email.
Swade’s organization doesn’t take positions on legislation, including Pielli’s. But she said raising municipal EMS taxes, increasing mutual aid among agencies, and establishing EMS authorities are some solutions the council supports.
David Sanko, executive director of the Pennsylvania State Association of Township Supervisors, told Spotlight PA that the higher taxing limits proposed in Pielli’s bill would enable better local decision-making.
Arden Knapp, chair of the Pleasant Township Board of Supervisors in Warren County, told Spotlight PA the proposed measure is “really necessary.”
Knapp’s rural township now taxes the maximum rates for both fire and EMS services, but revenue continues to be strained, because a third of the township’s land mass is public forest that does not generate tax income.
The township is “taking every bit of that EMS tax” as well as additional monies from the general fund to ensure ambulance services for residents, he said. Part of the cost goes to hiring a private, nighttime ambulance, because staffing has been a struggle.
Knapp said he believes residents will support a potential increase because they realize the financial reality of fire and ambulance services — something Pellegrino, Sanko, and Pielli told Spotlight PA they have observed.
“When you’re dealing with municipalities, I think for the most part, they try to be as responsible as possible and set the rates precisely [as] what they believe is the reasonable amount of revenue that they need,” Greene, of the Local Government Commission, said. The commission tracks which municipalities take advantage of Act 54 and studies the impacts.
Some key questions Greene and his agency will study include why municipalities opt to levy these special real estate taxes, how the increased funding is spent, and whether higher fire and EMS taxes alleviate fundraising pressures. The commission’s assistant director, Kristopher Gazsi, said the study will hopefully inform future bills.
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