Fire departments across the country are feeling the fallout of the depressed economy. A sinking housing market is dragging property values down, and with them property tax receipts. Unemployment and rising debt have left for dead retail sales and, consequently, sales taxes. Add escalating fuel costs to the equation, and it's tough not to feel like the country is in a depression.

I've spoken with a number of fire chiefs across the country, and the lack of money is having a serious affect from California to New York and everywhere in between.

Last year, Florida lawmakers mandated a roll-back in property taxes to the tune of $60 million. This year, the state authorized a constitutional amendment that would expand the Homestead Exemption and put caps on capital growths. According to Miami-Dade Fire/Rescue Chief Financial Officer Scott Mendelsburg, the combined impact of last year and this year amounts to $100 million in tax revenues Mendelsburg won't receive.

Mendelsburg did anticipate the state's actions and put $17 million in reserves based on a five-year strategic plan. And everything from take-home vehicles to technology (like traffic light interruption systems) is being considered to save fuel and running costs. At the end of 2009, however, Miami-Dade Fire/Rescue either will need to start looking for a new revenue source or create a more economical department.

Farther north, Oak Brook, Ill., once was known for its royalty-filled polo fields and was home of the first high-end shopping mall in the Midwest. But the Oak Brook Fire Department is facing a crisis because the city's budgets are based on retail sales tax, and revenue is way down. Property values also have plummeted, and since homeowners can't sell their homes for what they were valued, property tax receipts dwindled.

Oak Brook Fire Chief Jim Bodony is facing wage freezes and serious cuts in his department, including shutting down public education, fire prevention and paid-on-call service. Laying off contract paramedics would leave Oak Brook down one ambulance.

I've been told of a combination department that had $18 million in a reserve fund, but new facilities and equipment have reduced its reserve to less than $600,000, and the future looks bleak. Another nearby town is losing 18 firefighters

Departments that maintain strong support from their communities fare better. The Phoenix Fire Department won community support when a significant public safety enhancement vote passed last year. While some city departments were cut pretty deep, police and fire budgets were held to 3% reductions. Fire Chief Bob Khan was able to trim non-operational programs and limit overtime, but not operations and training. “If you look at it from the 10,000-foot level, you see a strong fire department ready to serve the community,” he said. “The chink in the armor was probably more the ‘wants versus needs.’”

North Las Vegas (Nev.) Fire Chief Al Gillespie believes the city's tradition of frugality has helped his department, as has sitting down with the entire department to find ways to help stretch the budgeted dollars. One of the high growth areas in the southwest, North Las Vegas has seven fire stations, another seven under construction and 10 major annexations on the horizon.

Volunteer fire departments have a long history of creating budgets from nothing, so their creativity will need to go into overdrive. Educating the community on the needs of the fire and emergency services could go a long way to help relieve fading budgets.

Perhaps it's time for the FIRE Grants process to be carefully reviewed. A quick glance at the payouts could free up millions of dollars for needy fire departments. Wait, wasn't that the original purpose of the FIRE Act?

Former President Harry Truman had a sign on his desk that read, “The buck stops here.” Fire chiefs across the country are finding that the bucks are stopping far short of their desks. I prefer what my mother used to say: “It's not a problem, it's a challenge.” How is your department addressing financial challenges? Write and let me know.