Emergency Services Districts and their economic benefits
By: Dr. M. Ray Perryman
Eight million Texans are served by an emergency services district (ESD) when they have fire or EMS needs. If you live in an ESD, when the fire truck or ambulance shows up, it is likely the ESD that is providing the service -- not the city, county or state. For many reasons, this is good news for Texans.
Texas is quickly outgrowing the abilities of cities and rural volunteer fire departments. As a result, emergency services districts are becoming increasingly important to ensure the safety and protection of communities throughout Texas, and voters continue to approve the creation of ESDs for that purpose.
ESDs are designed to ensure adequate and stable funding for local emergency services for all residents in the district. Because ESDs are solely dedicated to protecting life and personal property in the communities they serve, they can offer cutting edge fire and EMS services while spending less than municipalities that offer services of similar scope and scale.
My company, the Perryman Group, recently undertook an analysis of the cost savings associated with ESDs as compared to other options such as municipalities. Our assessment quantified four key measures of business activity including:
- Total expenditures – this measures the dollars changing hands as a result of economic stimulus.
- Gross product – this is the production of goods and services that come about in each district.
- Personal income – this is the dollars that end up in the hands of the people in the district.
- Job Gains – these are expressed as “jobs” or “job-years.” A “job-year” is one person working a full year, though it could be multiple people working partial years.
By comparing the median costs for comparable municipal services with the costs to operate an ESD, The Perryman Group found that ESDs generate estimated benefits between $300 million and $528.2 million in annual gross product and the creation of between 2,947 and 5,188 jobs.
The study also examined Insurance Services Office (ISO) ratings. ISO ratings are often used by insurance companies when setting insurance premiums. In short, a better ISO rating can create lower premiums for businesses and homeowners district. The presence and use of ESDs can result in all-around savings for residents of the district, as well as local businesses.
Based on the study, The Perryman Group found that, with an assumption of a 3% rate reduction, which is consistent with available information, the establishment of an ESD would generate economic benefits including $26.6 million in annual gross product and 261 jobs within the district.
These numbers are of major significance, especially during current economic and budget scenarios brought on by the impact of COVID-19. ESDs offer meaningful economic impact and provide jobs for local communities. Texans approve of ESDs and continue to create and support them at the ballot box.
ESDs are a great example of how local control works. They know what is best for the communities they serve and use their limited taxing authority to save lives and protect property. Many areas of Texas depend on ESDs to provide adequate protective services. With the formal funding structure provided by ESDs, they provide a stable source of funds for fire protection and other protective services, cost savings, and economic benefits.
Dr. Ray Perryman is President and CEO of The Perryman Group, an economic research and analysis firm based in Waco, Texas.