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Martin says annexation aids tax rebate

February 24, 2004|by GREGORY T. SIMMONS

gregs@herald-mail.com

City Finance Director Alfred Martin says the city's annexation policy - the way the city adds land mass to its borders - helps the city keep its piece of the pie.

That pie, he says, is the annual tax rebate - or differential - the county gives to Hagerstown and the eight towns in the county. This year it's worth $1.25 million, about $1 million of which is going to Hagerstown to be used for public safety, and parks and recreation.

The money is collected by the county as part of the regular tax process and divided among the other municipalities based on an equation that factors in the municipality's population, and total property and income taxes.

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While Smithsburg's share this year - $59,045 - pales in comparison to Hagerstown's, the share increased by $13.4 percent, while Hagerstown's share increased by 12.3 percent.

Because of population surges in towns like Smithsburg and Boonsboro, there's a concern that the city's proportion of the fund will decrease, constraining the city's "ability to generate the revenues needed to fund its operations and public service needs," according to a report Martin submitted for last week's mayor and council work session.

That is where the city's annexation policy can help the city keep pace, Martin said.

The annexation policy states that for properties that lie directly outside the city line, property owners must agree to be incorporated into the city limits if they want city water or sewer service.

Mayor William M. Breichner said Monday that the city generally accepts that there are benefits to adding land to its map. New residential properties and commercial properties yield property taxes, and people who live in the city also yield income taxes.

Breichner said he doesn't think the city needs to go about adding to the city any differently than it already does. He said that so far, annexations have been of properties of developers who wanted to join the city.

The city doesn't officially market itself to bordering properties, Breichner said, but "I think it's a matter of salesmanship and being able to sell municipal services to developers who are on our fringes. ... That's what's worked in our past."

Martin said he supports the annexation policy, and long-term trends like the tax differential and the number of new homes that are predicted for the city are indicators that annexation is good for the city.

"They're looking more positive with the annexation policy than without it," Martin said. "I think the city is poised and is heading in the right direction."

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