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PHOENIX — Fire districts cannot charge special fees to developers to make up for inadequate tax proceeds, the state Supreme Court ruled Friday.

The justices sided with a major Arizona builder in ruling a $387 "facilities benefit charge" levied by the Northwest Fire/Rescue District near Tucson on each new house is illegal. The court said there is no authority for such a special fee.

Justice Michael Ryan, writing for the unanimous court, acknowledged the "economic strain" fire districts face in rapidly growing areas, because the structure of state tax laws means revenues cannot keep up with construction.

But Ryan said, absent specific authority, these fire districts can't supplement their property taxes with this type of fee.

Friday's ruling is a defeat for the more than 130 fire districts in the state that interceded in the case to protect their ability to levy fees.

But it is a key victory for developers, and potentially, for the home buyers who would end up paying the fee through higher sale prices.

Randy Karrer, a division chief for the department, said the decision leaves just one option: get the Legislature to change the law.

Generally speaking, fire districts are financed by property taxes. But those taxes are based on the value of the property.

And houses that are under construction are on the tax rolls as unimproved vacant property — meaning a lot less money is collected.

This legal battle goes back to 2003 when three partially completed homes in the 140-square-mile district caught fire, resulting in the fire department's being dispatched.

That led to the district's Governing Board's decision to assess a $387 fee that had to be paid before building permits could be issued for new houses.

The fee was based on a consultant's report on the cost of providing the facilities to meet the needs of communities under construction.

When U.S. Home Corp. refused to pay, the district sued.

In the interim, the fee has remained uncollected. Karrer said he believes the district would have collected more than $600,000 by now had there been no challenge.

A trial judge sided with the builder. But the Court of Appeals concluded state law allows fire districts to levy special assessments.

The high court said that is true. But the justices said a special assessment can be levied only for specific purposes — and only if each property pays its fair share.

This fee, Ryan wrote, was simply a way of supplementing the fire department's budget for the broader goal of keeping up with demand.

"Without a specific plan and cost estimate, there can be no way of knowing the property owner's share of the improvement costs or whether a particular property will be benefited at all, let alone whether it will receive a benefit different from all other properties in the district,'' Ryan said.

And the judge said the district failed to show the money collected would be spent to benefit the properties in question, as the funds were not to be segregated but simply put into the general fund budget.

Karrer said the district board believes the assessment is appropriate, as those houses under construction need fire protection. And that, he said, means new stations, equipment and staffing — things that cost more than the taxes collected on property classified as vacant land.

And he said it would not be fair to raise the property taxes on everyone else beyond what is expected to be a tax rate of $2.35 per $100 of assessed valuation. That computes out to $470 a year on a $200,000 home.

In Friday's ruling, Ryan also took a slap at the appellate court, which concluded that the fact the fire district has an elected board ensures that the money collected is properly spent.

"The assessment here was not levied against qualified electors of the district," Ryan wrote.

"It was the builder, not a qualified elector, who was charged the assessment upon application for a building permit," he continued.

"Therefore, the public accountability check on this assessment was lacking."