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Nonprofit input eyed in council's budget plan

Finance Director Alfred Martin said about 21 percent of the tax base in the city is tax-exempt.

Finance Director Alfred Martin said about 21 percent of the tax base in the city is tax-exempt.

January 15, 2003|by SCOTT BUTKI

scottb@herald-mail.com

The Hagerstown City Council Tuesday grappled with possible ways to increase city revenues to address an estimated general budget shortfall of at least $1.25 million, including asking nonprofit agencies to contribute half of what they would pay if they were not tax-exempt.

The council also asked Finance Director Alfred Martin to explore the benefits of imposing an impact fee on new residences, with the proceeds paying for firefighting and police expenses.

The council asked Martin to try to determine whether the city would benefit if it asked nonprofits like the Hagerstown YMCA to volunteer to help the city get through funding shortages.

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About 21 percent of the tax base in the city is tax-exempt, Martin said. That includes nonprofits, churches and schools, he said.

The city provides services to those groups but they do not pay taxes, he said.

Martin gave the council a packet of information containing articles about a variety of ways to raise revenues, including the method of appealing to nonprofits, which has been used in York, Pa., and other places.

Council members were split on whether to sell private advertising on city facilities and equipment, including police cruisers. Councilman Kristin Aleshire said he opposed the idea.

"I am not saying I support it but I support hearing what ideas people have in mind," Councilman Lewis C. Metzner said.

Hagerstown Mayor William M. Breichner said last week he thinks the city will have to raise taxes again this year to balance the budget.

To balance the current year's budget, the city increased real estate and business property tax rates, trash fees, and water and sewer rates.

Before the council adopted a $25.57 million budget in June, the Finance Department estimated the city would face a $678,368 shortfall for fiscal 2003, which began July 1.

In September, Martin projected the shortfall would be closer to $1 million.

Martin is now estimating the shortfall will be closer to $1.25 million.

The financial picture has become more bleak because revenues from city personal property tax and state income tax have been less than estimated and there are additional budget expenses, city officials have said.

The city also is looking at other ways to increase revenues, such as raising city parking rates, he said.

The city has been delaying filling some job vacancies and may defer some capital projects to address budget shortfalls.

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