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County's tax cap lowered

Rebates, tax credits likely not in future

Rebates, tax credits likely not in future

March 29, 2006|by TARA REILLY

WASHINGTON COUNTY

The Washington County Commissioners voted unanimously Tuesday to lower a tax cap on property assessments - from 10 percent to 5 percent - effective in fiscal year 2008, but a plan to issue rebate checks or credits on tax bills might be off the table.

The County Commissioners instead discussed the possibility of cutting the property tax rate to provide tax relief for the coming fiscal year after County Treasurer Todd Hershey said the proposed rebates or tax credits would require a lot of administrative work.

County residents have said rising property assessments are making tax bills unaffordable. For tax purposes, the cap limits how much property assessments may rise in a year.

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An average county property tax bill is $2,370, based on a house that sells for $250,000, the median sale price in the county, according to the Maryland Department of Assessments and Taxation.

Commissioner John C. Munson proposed cutting the tax rate by 6 cents, saying that distributing rebate checks or tax credits would be an administrative "nightmare."

Munson also said rebate checks would cost about $18,000 to mail.

"Forget the rebates, forget the tax credits," Munson said. "If some future commissioners think it's a better deal, then they can do it. I think we need to go with a 6-cent tax cut."

The county's current property tax rate is 94.8 cents for every $100 of assessed value.

A 6-cent tax cut would cost the county $5.5 million, Munson said. The commissioners previously agreed to set aside $5 million for tax relief, so they would only have to come up with $500,000 to pay for the proposed cut, he said.

Munson said finding the money wouldn't be problem, because the county anticipates about a $10 million increase in property tax revenue for fiscal year 2007, which begins July 1, 2006.

He also said the commissioners shouldn't be afraid to cut county budgets to save money if necessary.

Commissioners Vice President William J. Wivell supported a tax cut for fiscal year 2007, and Commissioner James F. Kercheval said it was an option to consider.

If a cut is approved, Wivell and Kercheval said, the property tax rate should go back up to the current rate for fiscal year 2008. Wivell said that's when the lower assessment cap would become effective.

Munson, however, said he wanted the tax rate to be cut permanently.

Commissioner Doris J. Nipps said restoring the tax rate in fiscal year 2008 would appear to the public that the commissioners were raising taxes.

All five county commissioner seats are up for election this year.

Kercheval said a possible tax rate cut didn't have to be decided immediately.

"I think ... this is a real struggle for all of us," Nipps said.

She said the commissioners were sincere about providing some type of tax relief but, "the question is, exactly what is that?"

County Budget and Finance Director Debra Murray said the lower cap will result in a loss of a little more than $3 million in fiscal year 2008 and a cumulative loss of more than $13 million through fiscal year 2011.

The Washington County Delegation to the Maryland General Assembly has criticized the commissioners for not acting sooner to lower the cap.

The legislators said that if the commissioners didn't vote to lower the cap Tuesday, they would take matters into their own hands.

Nipps said at the meeting that while lawmakers were requiring the commissioners to take action, they weren't interested in providing residents with any state tax relief.

"The state is not even considering it, and I find that very disappointing," she said.

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