Ocean City Today

County to advertise property tax rate hike in FY18 budget

Commissioners can still make cuts to departments in proposed financial plan
By Brian Gilliland | Apr 06, 2017

(April 7, 2017) While insisting her own calculations are correct, Kathy Whited, Worcester’s budget manager, still wanted to wait for confirmation from the state before advertising what the proposed tax rate in the county might be if the commissioners chose to fully fund all departments’ budget requests.

To show local governments and taxpayers what tax rate would generate the same amount of revenue as it did the previous year given changes in the local tax base, the state calculates what’s called the constant yield tax rate each year ahead of budget time. This year, because of an increase in property assessments, the county is expected to realize about $2 million in new property tax revenue, which caused the constant yield rate to drop below the current property tax rate of 83.5 cents per $100 assessed to 82.2 cents.

Any time a county wants to set its tax rate higher than the constant yield, it must advertise its intention to do so. It was Whited’s intention to have that advertisement approved during Tuesday’s meeting, but a difference in methodology between the commissioners and staff brought delay to the process.

At issue is about $1.7 million transferred in from the county’s budget stabilization fund — a savings account established during the boom years to help the county weather the bust years. The sitting board of commissioners is reluctant to touch those funds, but has done so during the past two budget cycles at least.

This year, county staff included the transfer and listed it as revenue, irking a couple of commissioners.

Commissioner Chip Bertino renewed his objection to the inclusion of those funds as part of the budget discussion, and said he felt as if the board wasn’t being as transparent as it could. Commissioners Ted Elder and Jim Bunting also cried foul at the move.

Commissioner Bud Church asked Harold Higgins, county administrator, his rationale for including the transfer in the request.

Higgins said the $1.7 million transfer is intended to offset increases in certain enterprise fund expenditures, like comfort station upkeep. He said the exact amounts were intended to be worked out during ongoing budget work sessions. A few enterprise fund budget lines, like wastewater treatment plants, are facing rate hikes this year since the fees didn’t cover expenses. Enterprise funds are managed by the government, but are expected to pay their own way.

So, instead of a proposal to increase the rate to 85.6 cents per $100 assessed to cover a shortfall of about $5 million, the county intends to advertise a rate increase to 86.7 cents, which will cover the $6.7 million shortfall without the transfer from savings.

At this point, the county is struggling with the raw numbers — the total money it expects to come in versus all of the money the departments and commissioners request for the next fiscal year. The commissioners have signaled their intention to trim the request, but have not yet begun that process, partly because some departments have yet to present their plans.

The remainder of the departments are scheduled to deliver their proposals during a work session scheduled for next Tuesday. The county will hold a public meeting on the budget on May 2, at 7 p.m. at Snow Hill High School.

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