Higher sales tax on fireworks could fund pensions for volunteer firefighters

By Scott Thistle, Sun Journal
Posted April 18, 2013, at 2:19 p.m.

AUGUSTA, Maine — Hoping to grow the ranks of Maine’s volunteer fire departments, lawmakers are contemplating a bill that would add another 5 percent sales tax on consumer fireworks in Maine.

Sales tax on fireworks would be 10 percent instead of the standard 5 percent for other retail sales.

The revenue raised would be used to create a pension fund for volunteer firefighters who put in at least 20 years of service to their communities.

The bill, LD 1154, sponsored by Rep. Joyce Maker, R-Calais, aims to address a troublesome trend in rural Maine, according to Jeff Maker, a Calais volunteer and the treasurer of the Maine State Federation of Firefighters. The federation represents more than 7,000 volunteer and full-time firefighters in Maine, Jeff Maker said.

The Legislature’s Labor, Commerce, Research and Economic Development Committee held a public hearing about the bill on Wednesday.

Maine, like the rest of the U.S., is facing a steady erosion in the ranks of volunteers, and Maker said total volunteer forces in Maine have decreased from about 12,000 to between 9,000 and 10,000 during the past two decades.

“Current day economic and societal demands are competing for the call and volunteers’ available volunteer time,” Jeff Maker said. “Family duties at home, multiple jobs to maintain a living wage — a living standard all take away from time.”

Michael Azevedo, chief of the Carmel Fire and Rescue Department, was more blunt in his assessment of the declining numbers of volunteers and what it could mean.

“I don’t have the people to fill the equipment and gear that I have,” he told the committee. “That’s a common problem in our mutual-aid district.”

Azevedo said two years ago he had to sit down with his town’s Board of Selectmen and give some disturbing news.

“I can no longer guarantee you a response if someone dials 911,” Azevedo said. “I can’t do it. I can’t promise you they are going to show up.”

Of his 28-person roster, Azevedo said he can regularly count on 12 people to show up on a call. But like Maker said, the increasing demands of work and family have made volunteering at the community level a third priority for most people.

Azevedo said he did not know whether the pension fund would be a huge help in recruiting and keeping volunteers but it would be a help.

If approved, the bill would set up a system that would create a base amount that firefighters would receive after 20 years of service. It would also be set so they could contribute to their own retirement fund, much like a 401(k) retirement package, said Edward Holohan, an actuary who testified in favor of the bill.

Holohan said the program wasn’t technically a pension, and the payment most volunteers would receive on retirement would be based on contributions. Those who only took the base amount and made no additional contributions would get a relatively small amount upon retirement. Holohan did not say how much that would be. Still, he said the approach was innovative and one he had been working on with firefighters’ groups.

Testifying against the measure was the Maine Municipal Association. Geoff Herman, a lobbyist for the association, said the MMA’s policy committee voted to oppose the bill because it treated one group of workers differently than another by providing them with an additional benefit.

From the employers’ perspective it was important that a benefit package be integrated with all the employees of a municipality, Herman said.

“It doesn’t work when some employees are treated in a different way than others from a compensation standpoint,” Herman said. “It works against that interest of the employer toward having an even-handed approach to benefits.”

He said the other concern for municipalities was that state-run pension programs often turn into municipal-run pension programs when the state abandons them because of costs. He said one example was the proposal in Gov. Paul LePage’s budget plan to push more of the pension costs for teachers onto local towns and school districts.

“Systems that are managed and created, not by the employer, but by a third party are problematic from the municipal perspective,” Herman said.

But at least one firefighter countered that perspective, noting volunteers were not full-time paid employees and the wages they did receive for their time were relatively low compared with a full-time teacher’s salary.

“I pay my firefighters $7.50 an hour,” said Dover-Foxcroft Fire Chief Joe Guyotte. “I get $10 an hour, I’m the highest paid officer on the department.”

Guyotte said he had 36 people on the roster but if a fire gets toned out during the day he will have three people there. He said the retirement incentive could help that.

“It might, might give a little bit of incentive to say, ‘Twenty years down the road, 20 years you’ve been a firefighter, we are going to give you something,’” Guyotte said. “Not much, but it’s just another retention tool to keep a full roster.”

The bill will come back to the committee for a work session later this month.

http://bangordailynews.com/2013/04/18/politics/higher-sales-tax-on-fireworks-proposed-to-create-volunteer-firefighter-retirement-fund/ printed on September 17, 2014