At the February regular meeting Orange County Emergency Services District 3 board of directors voted unanimously on a resolution to call for an election to adopt an Orange County Emergency Service District 3 sales and use tax of one and one-half cents on the dollar. The proposal will be on the May 9 ballot for residents living in the ESD 3 area.

This general sales tax is allowed under Article Title 9, Chapter 776 of the Health and Safety Code, This law allows Emergency Services Districts to call for an election for a sales tax where in the sales tax for businesses in that district do not meet the maximum tax allowed for all taxing entities in that area.

“Because the Emergency Services District No. 3 does not lie within a city, the district can, upon approval of election by voters in that ESD, levy a sales and use tax to finance the ESD,” ESD 3 board president Joe Parkhurst said.
“ESD 3 furnishes emergency services including fire protection, rescue, whether extraction from automobile accident, water, or other situation, as well as first responder service for the Little Cypress area that was not annexed by the city of Orange recently.

“The annexation by the city of Orange, which took approximately 27 per cent of the district’s tax base, has forced the district to look to an alternate method of funding,” Parkhurst said. “We feel that in order to continue the level of services now offered and have any chance of improving services, we must seek new revenues. Because of losing the tax dollars due to the Annexation by Orange, we are  having to operate at a budget deficit this budget year. We fortunately can absorb the deficit this year and hopefully next, if we have no major unexpected expenses.”

“Without passing this sales and use tax this year, the district will, in all likelihood have to cut services in the near future,” Parkhurst added. “We feel that this type of tax would be much better than raising the property tax to its maximum level of .10 allowed by law, because a sales tax is paid by anyone purchasing goods or services from businesses or industry in the ESD 3 area. People passing through the district and making purchases would share in paying the tax. A sales and use tax such as this is levied in almost every city in Texas. This tax would make the sales tax rate the same as in most incorporated areas, he continued. “Many ESDs across the state in rural areas are going to this method of financing their emergency services.

“We hope that once we have the new sales and use tax in place that eventually we can lower or do away with the property tax of .06 thereby saving the local property owners money and still maintain or improve the services now offered,” Parkhurst said.

“ESD 3 went through inspection and examination by insurance regulators who placed a “4 “rating for all of the district.  This is one of the best ratings of any rural ESD in the state,” he said. “Rates are ranked from 1-10 with a 1 being the highest rating. Homeowners insurance rates are based on this rating.”

In January, the city of Orange sent notice to ESD 3 that it was annexing more territory in the district that was not included in the 2006 take over. This will remove additional income from the ESD.

A representative of the ESD 3 board must, not later than 30 days after the date that the election order was ordered, give, for informational purposes, written or oral notice on the proposed imposition of the sales and use tax, including the reasons for the change, to the commissioner’s court of Orange County.