Council told staff to go back and look at possible areas that could be cut and new revenue sources, like charging people with homeowners' insurance for fire calls. But it's unlikely deep cuts will be found, since the city trimmed the property tax rate by a penny in fiscal year 1999 to $1.73 and held it steady in 2000. The idea that fire service will yield big revenue in an area where CRS transports so many uninsured folks falls into the area of wishful thinking.
The city's plight got me to thinking. At a time when the State of Maryland has been piling up monstrous surpluses, both the city and the county governments are scrambling for cash. Why is that?
In the city's case, at least, it's because unlike the state, which built up its surplus on income and sales taxes - two areas that swell when the economy's good - the city depends heavily on property tax revenues. And city officials knew two years ago that this particular well was drying up.
In October 1998, Planning Director Ric Kautz reported that in the last triennial assessment, the percentage of properties that had either declined in value or grown by less than 5 percent had increased dramatically.
As a result, Kautz said, the city will face large general fund deficits for the next several years. Some council members wanted further analysis, but declined to order it after Al Martin, the city's finance director, said that would require a lot of staff time.
And then Councilmember Susan Saum-Wicklein said that if the value of rental properties is declining, the city might want to do something to encourage owners to fix them up. The council already knew that rental housing was part of the city's problem.
In the early 1990s, a study by the Federal Reserve Bank of Richmond found the percentage of rental or owner-occupied housing was 60 percent rental, 40 percent owner-occupied, just the opposite of what experts thought it should be.
Why does that matter? Because, as noted previously, the city depends on property-tax revenue for more than 50 percent of its general-fund budget. And because homeowners generally take better care of their dwellings than renters - to protect their investments, primarily - the value of their property is higher.
And so, barring major changes in the state's tax structure, the city government must do several things - look again at the renovation property tax-credit system developed in the early 1980s by then-Mayor Donald R. Frush, encourage conversion of rental units back to owner-occupied properties and push owners of rental property to fix it up.
The argument against Frush-type taxtax credits (since repealed) is that you have to forgo revenues for years. On the other hand, the city has done basically the same thing on a larger scale with projects like the Centre at Hagerstown, so why not give it a try on a smaller scale?
Encouraging home ownership is already being done through the Greater Hagerstown Committee, a consortium of local banks and city government which began efforts on that front more than five years ago.
The other piece of the puzzle - encouraging the fix-up of rental properties - is one city officials have had a tougher time fitting into place.
Right now, city inspectors look at rental housing only when someone makes a complaint. Which means that if you don't care what sort of dump you're living in, why irritate the landlord, whose goodwill you might need if you're a little slow with the rent sometime?
One way to take that burden off the tenant would be a systematic rental-inspection program. In an April 1999 column, I talked to Hagerstown inspectors proposing such a system here for the 9,300 rental units in the city. So far their plan has gone nowhere, although Councilman Lew Metzner suggested creating a special tax for blighted propertes.
Working on the revenue side of the city budget by encouraging - or requiring - people to improve their properties would not be a quick fix for a city budget increasing at more than 4 percent a year when property tax revenues aren't growing by more than 2 to 3 percent. But when you're driving around Hagerstown, reflect on the fact that every tax dollar not paid by the owner of some rundown property is one that's got to be made up by somebody else, perhaps even somebody like you.
Bob Maginnis is editorial page editor of The Herald-Mail.