Special districts in many states operate on a small share of property taxes. Some, like water and electric utility districts, charge customers rates for the services. In most states, special districts do not receive shares of sales taxes. In states where a ballot initiative process is allowed, special districts are able to ask voters for additional assessments; however, it is a complicated process and usually difficult to win.
Communities rely on special districts for many of their most critical services, including water, wastewater, and fire protection. Therefore, special districts must sustainably maintain critical infrastructure and continue the delivery of their essential services through economic downturns, natural disasters, and other emergencies.
Special districts strategically develop financial reserves to ensure continuity of vital quality of life services. Many maintain pipelines, firefighting equipment or sanitation plants, for instance, on relatively small budgets. Districts lean on these funds during a prolonged crisis with long-term fiscal impacts to ensure the community is prepared for the next inevitable emergency, like an earthquake, flood, hurricane, or pandemic.