Even before getting to whether the proposed funding algorithm is regressive (as it appears to be), the question we have to ask ourselves is whether a single-purpose special district entity is really a benefit. Even if there was a guarantee that nobody would pay a dime different for fire response, the concern is whether creating these single-purpose entities is good for the community as a whole, given the way that single-purpose entities focus entirely on their parochial interest and care nothing for the other interests that make up a community.
One of the virtues of having fire inside the city bureaucracy is that the council can force the fire department to consider things besides their own parochial priorities. If we have a special fire district with its own taxing authority, who will be able to tell them anything?
Think about getting into electric trucks -- fire trucks that sit still 99% of the time and only travel short distances the other 1% are pretty much a perfect use case for heavy electric vehicle applications. Diesel emissions are horrible and are health threats, and we need to decarbonize our fleets. With some foresight, we can start pushing diesel trucks out of our system and start buying electric, possibly charged with solar on the fire station roofs. That's the kind of decision that a city council can make, having priorities other than the single-point focus of working within the fire department paradigm.
Similarly, fire departments all over the country fight against measures for traffic calming and road diets, because they are locked into the behemoth fire truck model. A city council can weigh priorities other than fire response along with fire response, but a fire-only authority seems very unlikely to care about all the other aspects of what their choices cause for others.
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