No change in revenue split for county’s fire premium tax

May 29-- May 29--Two weeks after the first reading of a new ordinance that would have made major changes to how the county's fire insurance premium tax is collected, Pulaski County Fiscal Court opted to keep much of the old one's provisions in place.

Like the one it replaces, which was set to lapse after June 30 due to a "sunset clause," Ordinance #310.7 keeps the "fire premium" tax rate at 5.5 percent with four percent of revenues going into the Fire Sinking Fund (to be utilized for the emergency response agencies under the Pulaski Fire Training Commission umbrella) and 1.5 percent going into the General Fund. The version presented for the first reading would have placed all revenues into the county General Fund to be used as needed, save for a flat $2.5 million allocated to the Fire Fund.

That version created a bit of controversy, with several magistrates on May 14 either outright opposing it or expressing confusion over multiple versions which had apparently been bandied about outside open court. On Tuesday, the magistrates proceeded with a unanimous vote of approval for the version that would keep the revenue split as is -- the only major change being the removal of the sunset clause. Now the fire premium tax ordinance may be amended or updated as the court sees fit.

District 4 Magistrate Mark Ranshaw, who also serves as a volunteer firefighter, said he appreciated his colleagues' help in keeping the tax as is. "I'm sure the firefighters appreciate what you did too."

The first insurance premium tax ordinance was passed in 1985, calling for insurance companies to pay a premium tax on policies sold in the county. The revenues were initially allocated solely for the county's Fire Protection Sinking Fund. In June 2009, however, a new ordinance split the revenues of the 5.5 percent tax -- with the Fire Fund keeping four percent and the county's General Fund getting 1.5 percent (or just over a quarter of the revenues).

At the time, county officials said the change was needed in order to balance the upcoming county budget and a "sunset clause" was included so that the ordinance would either lapse or have to be renewed in 2012. The ordinance was again renewed in May 2012 with a new sunset clause set for June 30, 2019.

The FY 2019-20 county budget, which also had a first reading on May 14 but was not presented Tuesday as county officials are still awaiting state approval, projects the insurance premium tax will generate $3.7 million in the coming year.

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