Tax hike suggested for city shortfall

March 07, 1998


Staff Writer

Talk of a tax increase to balance the City of Hagerstown's general fund budget next year touched off a debate between City Council members Friday.

A possible tax increase is one of four options that city financial officials offered to council members to offset a $419,733 shortfall in the 1998-99 budget.

But Councilman Alfred W. Boyer argued against a tax increase, saying it was "time for government to live within its means."


Boyer said holding the line on taxes was part of his campaign pledge.

"You have to consider those on fixed incomes," Boyer said.

Although Councilman Lewis C. Metzner said he did not want to see a tax increase, he did not see any way around it, especially considering the amount of money that was spent this year on bolstering the city police department.

"No one's saying that's our favorite revenue," said Councilman William M. Breichner.

No specific numbers were discussed.

A budget report developed by the city discusssed how a one cent increase in the tax rate would affect tax bills. But City Administrator Bruce Zimmerman said the numbers were only in the report to illustrate what affect a one cent increase would have.

A one cent increase would generate about $60,000. For a person who owns a house valued at $75,000, a one cent increase would hike their tax bills by $3 a year.

Other ways to reduce the shortfall is to decrease overtime spending in the police department, reduce capital expenditures, cut jobs, or reduce services, according to Zimmerman.

The general fund budget is the primary operating fund for the city. It is used to fund operations such as the fire and police departments, finance office and public works.

The general fund budget, which is expected to be about $20 million next year, is one part of the city's total budget. Once the water fund, light fund and other budgets are added, it rises to about $70 million.

Zimmerman must file a proposed budget to the council for consideration by the end of the month. Council members have to pass a budget by May 31.

Part of the reason behind the budget shortfall is flat property tax revenues, Zimmerman said. Property tax revenues dropped by about $467,704 this year, and they are expected to grow little through 2004, Zimmerman said.

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