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All costs considered, city is a bargain

March 27, 2002|BY BOB MAGINNIS

If there's one thing that irritates Hagerstown officials including Ric Kautz, the city's planning director, it's those real estate listings that advertise, "City services, but no city taxes!"

That implies that it's cheaper to live outside the city than inside the municipal boundaries, and it's just not true, Kautz said. To give him a chance to debunk what he feels is a persistent myth, I recently sat down with Kautz, City Finance Director Al Martin and Community Relations Director Karen Giffin to find out how city living can be cheaper, even if you must pay city taxes.

Some background: Both the Washington County and city governments levy property taxes. City residents pay both taxes, but the city gets some of it back in the form of a tax-differential payment from the county.

In 2000, for example the city got $894,294, which went to the government, not to the taxpayer. Last October, a committee studying ways to revamp the system said one possibility would be to lower the county tax rate for citizens who also pay a municipal property tax.

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But that hasn't happened yet and in a year when revenues are tight, it probably won't, though the county commissioners may promise help somewhere down the line. So let's look at the finances of the here and now.

Boiled down, Kautz's argument is simple: When you add up what you save on city services, it more than offsets the cost of your property tax. He offered several examples, all of which are contained in "Make Hagerstown Home," a publication of the Hagerstown Home Store, a city agency that helps renters become homeowners.

Let's take just one, a dwelling with a market value of $120,000 which houses a family of four that uses 20,000 gallons of water per quarter and 1,000 kilowatt hours of power per month.

City property taxes would be $830.40, but $294.79 can be deducted from income taxes, leaving a net tax liability of $535.61.

That's more than offset by the lower costs of city services, said Martin, who likened being a city taxpayer to "being part of a large homeowners' foundation."

For example, Martin said, there's trash collection. For $21 a quarter, city residents get twice a week garbage collection, once-a-week collection of yard waste during the growing season, plus a bunch of extras like mixed-paper recycling, free curbside Christmas tree pick-ups and twice-a-year bulk trash pick-up.

Fore the same service that costs $84 a year in the city, those outside pay $356 more, Martin said. Sewer costs for that same home are $277 less, power is $341.16 less and water $69.60 less.

The bottom line, Martin said, is that although that family of four pays $535.61 more in city property taxes, their savings on city services leave them about $500 ahead of their counterparts out in the county. And that's not all, city officials said.

"There's a whole intangible area out there that you can't put numbers on. We have 100 police officers to service a 10-square-mile area. The sheriff's department doesn't have that many to cover the whole county," Kautz said.

"It's the same thing with fire protection. We have a professional firefighting force which has a two-minute-and-30-second response time," Kautz said, adding that firefighters also check smoke detectors at no charge. The city also has its own fire marshals to investigate the causes of fires, all of which mean lower fire insurance rates for city residents.

The city also contains two 60-acre parks, a municipal swimming pool and amenities like the Maryland Theatre that many people can walk to, Kautz said.

If living in the city is such a good deal, I asked, why haven't I heard more talk about it?

Kautz said city officials have been working on getting the information together for some time Kautz said, while Giffin said an infomercial is in the works. When that's done, she said, it will be transferred to a DVD that can be distributed to prospective residents at places like the Home Store near City Hall on East Franklin Street.

Is there a downside to Kautz and company's financial picture? Yes. The more valuable the house, the smaller the savings. While the owner of our $120,000 home saves about $500 by living in the city, the owner of a $233,000 place saves just 21 cents.

It also works the other way, however, so that the owner of a home with a market value of $80,000 comes out $686.69 ahead of the game.

No doubt we'll get some responses from readers who choose to live in the county, even though it may be more expensive, because they don't like some aspects of city life.

That's okay. As I said in my Sunday column of two weeks ago, the new homeowners Hagerstown seeks won't come from Van Lear or Spring Valley. They'll come from Frederick or points further east, where they're being priced out of those markets.

Now that Hagerstown has assembled some facts that bolster its argument that city living is more economical, it needs to get them in front of the folks it has the best chance of attracting.

Bob Maginnis is editorial page editor of The Herald-Mail newspapers.

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