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Funding the Volunteer Fire Department
Randall R. Kincaid
published: 2005 | Case Study | Economics
Subject Area: Business/Government Relations; Economics
Key Issues: Public Policy; Public Affairs Management; Public Finance
Case Description: Leamon Brice, town manager of Davidson, North
Carolina, faced a budget problem concerning fire protection. Costs
could rise substantially if the town could no longer recruit enough
volunteer firefighters. Revenue had already fallen as a local
tax-exempt college cut its voluntary contributions to the department.
Revenues could fall even further if the county ceased paying for fire
protection in the rural area around town. Brice must first decide
whether to take immediate action or await a crisis. If he decided the
former, his options included maintaining the status quo, merging the
town's department with that of nearby towns; convincing the college to
make voluntary, but contractual contributions; or changing the basis
for funding from property taxes to fees. This case also shows how a
decision maker in a public setting can use economic concepts such as
tax expenditures, ability to pay versus benefits received, tax equity,
and free riders.
# Case Pages: 10
Case Number: 130032-25-2-9
Teaching Note: Yes
revised Aug 7/05
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