Hagerstown council must seek new revenue sources

May 26, 2006

The Hagerstown City Council this week decided it would hold the city's property-tax rate at its current level.

But those looking for long-term tax relief shouldn't get their hopes up yet, because the council also decided to delay decisions on high-dollar items until later.

We suggest that if the council wants to spend millions more for additional personnel and raises recommended by a consultant study that it must find a way to do so without raising taxes for 2007-08.

Though the council held the tax rate at 79.8 cents per $100 of assessed value, most taxpayers will see their bills increase anyway, due to an upward spike in property values.


Citizens will also see city power prices increase by about 42 percent, under the terms of a new contract with Allegheny Energy.

But what else might be on the horizon is unclear. The council agreed to delay action on implementing the first year of a consultant's three-year, $5 million plan to make city wages more competitive.

Also deferred was a decision on how to change employee and retiree health coverage to comply with new accounting rules that would force the city to put aside more money for those benefits.

And, on the table for 2007 is a proposal to hire 10 more fire department employees and two more for the police department.

How might all these costs be covered? The first, most obvious and fairest way is to persuade Washington County government to boost the city's tax differential payment to compensate for the county's ongoing practice of subsidizing some county residents' sewer rates.

That subsidy comes from the county's general fund, to which city taxpayers contribute. This is an election year and no city resident should vote for a commissioner candidate who doesn't agree to correct this injustice.

Another possibility: There are a great many nonprofit organizations in the city that pay no taxes, but which depend on city fire and police coverage.

If all of them paid a nominal fee, it could cover the cost of those additional firefighters and police. In Baltimore, some of the larger nonprofits responded to a proposal for such a fee by working out a voluntary payment plan.

We're sure there are other methods of raising money that wouldn't have the negative effects of a tax increase.

As we have said previously, a city that increases its tax rate every year - or even every other year - will have difficulty attracting new business investment and new residents. Increases in property values will provide additional revenues for the city government, which need not make citizens' pain worse by upping the tax rate, too.

The Herald-Mail Articles