12-11-2002, 09:42 AM #1
- Join Date
- Apr 2002
- Land of milk and honey.
Innovative tax benefits firefighters
Tax not foreign to fire crews
BY CHARLOTTE COOPER
Melrose Park, IL - When firefighters make a meal in their renovated kitchen, they have a mysterious-sounding budget item — the foreign fire insurance tax — to thank. This year, the tax generated $32,696 for Melrose Park, all of which must be used to benefit the Fire Department under Illinois law. The money comes from out-of-state insurance companies, which have to pay the village 2 percent of any fire premium they sell in the village. When the tax was first instituted, municipalities and fire-protection districts collected the money on their own. But in the 1930s, the Illinois Municipal League took over the job at the request of some member communities who were tired of dealing with hundreds of underwriters. Larry Frang, assistant director of the League, said the agency distributes $5 million a year to communities throughout the state. It keeps 5-7 percent of the total to cover its costs. Some towns “get no more than 50 or 100 bucks,” Frang said. “It all depends on how big a population you have and whether you have a lot of industries” that pay higher premiums. A case in point: heavily industrial Franklin Park got $51,100 this year even though it is home to 18,000 people. Elmwood Park is larger — with 25,000 residents — but got only $7,200 because it is almost exclusively residential. Who decides how the cash is spent was the subject of legal wrangling in the late 1980s and early 1990s. Some towns argued that the money should go into their general fund, which underwrites most municipal services. But the state courts ultimately sided with fire-protection districts and fire departments, which said each town’s cash should go into a separate fund that fire officials would control. The Melrose Park Fire Department has used the money to renovate the fire-station kitchen; install a new kitchen floor; buy fire gear and tools, such as CO-2 tanks; and purchase furniture for the station. Even newspapers delivered to the station have been paid for through the fund. “Some departments throw a picnic for families every year and label it ‘increasing morale’ ” said Melrose Park Fire Chief James Cesnauske. “It is a gray area.” The Bellwood Fire Department should be getting a check for foreign fire insurance funds for 2002 this week. The department has to finalize what the money will be used for this year. In the past, it has been used for equipment and other needs. “The bylaws require that the money be used on behalf of or for the betterment of fire departments,” said Dominic Conversa, deputy chief of the Bellwood Fire Department. Conversa said the department’s professional organization dues and coffee supply are typically paid for through the fund, as well as furniture, such as beds and chairs. He noted that a three-member board considers how the money should be spent in the Bellwood department and that firefighters vote on any proposed expenditure. Fire Chief Andre Harvey also has to OK the purchase before anything it brought into the station. “It is not just one person making a decision or buying something,” Conversa said. “I know because I tried.” Berkeley Chief Frank Sustr said his department also has not yet decided how its $4,042 in foreign fire insurance money will be spent. He noted when a decision is made, it will be put to a vote. Past uses of the money in the Berkeley Fire Department have included purchasing furniture. In Oak Park, every bench press and treadmill mile by firefighters is underwritten by the foreign fire insurance tax. Oak Park’s fund is governed by a board composed of three Fire Department personnel: a battalion chief, a firefighter and a lieutenant. Each year, they present a budget to the Village Board, outlining what expenditures they intend to have in the months ahead. “By law, we couldn’t use (the tax money) for a Jacuzzi or a badminton court,” Lt. Patrick Biswurm said. “It has to be something that will directly benefit the department in its work.” When the department decided to institute a physical fitness program several years ago, Biswurm said, it used the fund to buy equipment. More recently, the tax dollars have purchased an infrared camera, rescue tools and new box springs and mattresses for sleeping quarters at the village’s main fire house and two substations. Managing Editor Kevin Beese contributed to this report.
12-11-2002, 07:49 PM #2
This is nothing new here in Pennsylvania. We have been receiving what we call Firemen's Relief Funds for years based on the 2% formula.
The funds are given by the state to the local governments who then turn in over to the relief associations set up by the fire company(s). If there is more than one fire company in a municipality then there is only one relief association and they make the purchases for each company.
The state is very strict on what can and can not be purchased with the funds. It was always to be used strictly for safety equipment and training but over the last few years they have added to the list and now we can even purchase a computer for association use.
We get audited by the state every 3 years and we must follow their guidelines concerning forms, accounting codes and inventory control.
Larger companies and paid departments can use the funds for pension but we receive just enough to get by every year so I have to set a tough budget to follow. (I'm the relief treasurer)
Thanx for the post, I always thought that every state did the same as we do here.Steve Dragon
FFII, Fire Instructor II, Fire Officer I, Fire Appartus Driver Operator Certified
Volunteers are never "off duty".
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