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Public hearing on proposed Hagerstown budget set for Tuesday

April 29, 2002|BY DAN KULIN /Staff Writer

dank@herald-mail.com

The public will get a chance on Tuesday to weigh in on Hagerstown's proposed $79.55 million budget that calls for raising taxes and water and sewer rates in the fiscal year that begins July 1.

Public hearings on the proposed budget, and tax and rate increases will begin at 7 p.m. in City Hall.

There will also be a public hearing on the city's Community Development Block Grant Program spending plan. The Community Development Block Grant (CDBG) is a federal grant the city is in charge of spending.

The proposed budget, which was prepared by City Administrator Bruce Zimmerman, calls for raising the city's real estate and business equipment tax rates by 7.2 percent.

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The tax increase would help balance the proposed $25.7 million city general fund, which pays for city departments such as police and fire and is the only city fund that receives city tax money.

Increased spending in the proposed general fund includes about $1.2 million to cover the additional cost of employee wages and benefits, about $500,000 in increased spending on vehicles and construction projects, and about $90,000 to pay for two new firefighters.

The proposed real estate tax rate increase would add $53 to the tax bill of a Hagerstown homeowner with property assessed at $100,000. That homeowner's real estate tax bill would go from $732 this year to $785 next year.

The business equipment tax rate increase would cost a business with equipment assessed at $10,000 an additional $13 next year. That business owner's tax bill, which would be $183 this year, would be about $196 next year.

The business equipment tax is based on the cost, minus depreciation, of items such as furniture, fixtures and computers. Retail and manufactured inventories are exempt from the tax, as are manufacturing machinery and equipment purchased since 1995. The tax on older manufacturing equipment is gradually being phased out.

The City Council, which is scheduled to vote on the budget on May 28, can make changes to the proposed budget. The council has discussed possible budget cuts, but has not agreed on any. Any cuts could reduce the proposed tax increases.

Councilwoman Penny May Nigh has offered a plan to balance the budget without increasing taxes. Nigh is proposing eliminating city contributions to most nonprofit groups and dipping into the city reserve account.

The proposed budget also calls for raising water and sewer rates 3.5 percent on Oct. 1.

Together, those increases would cost the average water and sewer customer, who uses 13,000 gallons of water every three months, an additional $8.24 a year.

That customer's water bill, now $17.55 every three months, would increase to $18.16 every three months.

Meanwhile, that customer's sewer bill, now $41.47 every three months, would increase to $42.92 every three months.

The proposed $4 million spending plan for the city's CDBG program calls for continuing funding for many programs, plus a $900,000 contribution toward construction of a new community center in the West End. The community center is part of the Hagerstown Housing Authority's $73.5 million plan to demolish and replace the Westview public housing complex.

The CDBG program also funds the city's Single Family Homeownership Program, under which the city buys, renovates and then resells homes, helps pay for some police overtime costs and helps fund the Hagerstown Home Store.

The CDBG program is funded with new federal grant money, unspent city CDBG funds from the current year, money from CDBG loan repayments and income from the sale of homes through the homeownership program.

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