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Budget proposes tax increase

April 02, 2001

Budget proposes tax increase



By DAN KULIN

dank@herald-mail.com

Two months after hearing that a tax increase might be needed, Hagerstown's Mayor and City Council were given a proposed $74.8 million budget that includes a 10.5 percent property tax increase, a new fire response charge and a variety of fee increases.

The mayor and council also received a plan that would balance the budget without a tax increase. That plan calls for eliminating raises for some police and firefighters, cutting the annual street repaving program, slicing $100,000 for an expanded economic development program, and other cuts.

If approved, the property tax hike would cost a city homeowner with a $100,000 home an additional $73 a year. Such an increase would raise that homeowner's $692 annual city tax bill to $765.

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The proposed tax increase would generate another $1.3 million for the city.

The mayor and council are expected to begin discussing the budget today, and to hold weekly budget review sessions through April.

A public hearing on the budget for the 2001-2002 fiscal year, which begins July 1, is scheduled for May 1. The council is expected to take a final vote on the budget on May 22. The City Charter requires the council to adopt a budget by the end of May.

City Administrator Bruce Zimmerman, who is responsible for preparing the proposed budget, expects the mayor and council to trim the spending plan to lessen any tax increase.

"I do not anticipate the full (proposed) tax increase will be approved ... But I would recommend some sort of tax increase," Zimmerman said Monday.

Zimmerman's proposed budget also calls for increases to the trash collection fee, water and sewer rates, golf course fees, and the creation of a city fire service charge of $250 per response by the fire department.

Council members have discussed implementing such a fee, but only if they could ensure resident's insurance companies would pay the bill and residents would not have to pay out of their own pockets.

The proposed budget adds seven full-time staff positions to the city government, including new firefighters and police.

Under the budget proposal, water rates would increase by 3.5 percent, which would cost the average city water customer an additional $2.36 a year. The average customer's quarterly bill, which is currently $16.90, would rise to $17.49.

A proposed 3 percent sewer rate increase would cost the average customer an additional $4.84 a year. The average bill would increase from $40.30 every three months to $41.51 per quarter.

The average city water and sewer customer uses 13,000 gallons of water every three months. The water and sewer rate increases would go into effect in October, under the plan.

The trash collection fee would increase by $4 a year, moving from $21 a quarter to $22.

The proposed budget includes 75-cent increases to greens fees at the city golf course, which would bring the cost of a 9-hole round of golf to $7.50.

Golf cart rentals would increase by 50 cents, taking cart rental for a 9-hole round of golf to $8.75.

The proposed staff additions are: A chief code enforcement officer, two firefighters, one police officer, a police communications officer, a police data entry clerk, and an assistant public works manager. The three new police positions would be funded with grants.

If added, the positions would raise the number of city employees to 449.

The total $74.9 million proposed budget is about $10 million more than the current year's spending plan. About half of that increase is due to planned upgrades to the city sewer plant.

The general fund is $24.5 million of the total budget. The general fund supports departments such as police, fire and public works. City property taxes go into the general fund.

The proposed 7.3 cent tax increase would raise the city's real estate tax rate to 76.5 cents per $100 of assessed value. The current tax rate is 69.2 cents per $100 of assessed value.

The assessed value is now based on 100 percent of the estimated value of a property. But before this year, the assessed value was based on 40 percent of the estimated value of a property. Because of this difference, prior to this year, the tax rate was considered to be $1.73 per $100 of assessed value.

The change was only in how the tax rate is reported, meaning that the $1.73 and 69.2 cent rates produce the same tax bill.

The proposed budget includes almost $8.1 million for Hagerstown City Police, which is about $300,000 over last year's $7.8 million budget allocation for police.

The proposal includes about $3.8 million for the Fire Department, which last year was budgeted for almost $3.7 million.

The proposed budget was delivered to the mayor and council members Saturday afternoon.

The City Charter requires the City Administrator to present a proposed budget to the mayor and council by the end of March.

The proposed budget was made available to the public Monday.

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