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Council hopes to curb tax hikes

April 03, 2002|BY DAN KULIN /Staff Writer

dank@herald-mail.com

Hagerstown's Mayor and City Council will begin looking for ways to lessen proposed 7.2 percent increases to the city's real estate and business equipment tax rates next Tuesday.

Councilman Lewis C. Metzner said the council will review proposed major expenses, such as raises for city employees and hiring two new firefighters, which are part of City Administrator Bruce Zimmerman's proposed $79.55 million budget.

"The first thing we can do is look at whether personnel is going to be cut because that's 80 percent of the budget," Metzner said Tuesday.

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Council members agreed with his suggestion.

There was a consensus that taxes will increase, but different ideas on which direction they will go.

"I see 5.3 (cents) and my goal is 3 (cents)," Councilman Kristin B. Aleshire said. Aleshire was referring to the proposal to raise the real estate tax rate, which is now 73.2 cents per $100 of assessed value, by 5.3 cents.

Councilman N. Linn Hendershot said maybe the council should look at higher tax increases next year as a way to avoid future tax increases.

Zimmerman's proposed budget for the fiscal year that begins July 1 calls for increasing the city's real estate and business equipment taxes by 7.2 percent. The business equipment tax is determined by the cost, minus depreciation, of business equipment such as furniture and computers. Manufacturing equipment and inventory items are exempt from this tax.

The tax increases would help balance the proposed $25.7 million general fund, which pays for city departments, including police, fire and public works. The proposed general fund calls for an almost $1.2 million increase in spending on city employees' wages and benefits, and about $500,000 in increased spending on vehicles and construction projects.

The general fund is the only city fund that receives money from city taxes, and is about $24 million this year.

The proposed tax property increase would cost a Hagerstown homeowner with property assessed at $100,000 an additional $53 next year. That homeowner's city real estate tax bill, $732 this year, would be $785 next year.

A business with equipment assessed at $10,000 would pay an additional $13 next year if the proposed tax increases are approved. That businesses' equipment tax bill from the city, which is $183 this year, would be $196 next year.

City funds such as the water and sewer funds depend on income from water and sewer bills, not city taxes.

The proposed budget also calls for the water and sewer rates each to increase 3.5 percent.

The council agreed Tuesday to discuss the budget during future Tuesday afternoon meetings, and hold a public hearing on the budget at 7 p.m. April 30.

The council tentatively is scheduled to approve a new budget on May 28. The City Charter requires the council approve a budget by May 31.

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