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Hagerstown, county officials wary of lowering property tax rates

Adopting constant yield rates would lower taxes, but officials say services might be cut

Adopting constant yield rates would lower taxes, but officials say services might be cut

February 22, 2008|By JOSHUA BOWMAN

WASHINGTON COUNTY - Local governments could lower property tax rates by more than 5 cents next fiscal year and still earn as much tax revenue as they did this year, according to state calculations released Tuesday.

But several local elected officials on Thursday said governments would have to cut services and put projects on hold to adopt the lower rates.

The Maryland Department of Assessments and Taxation this week released its 2008/2009 constant yield tax rates, which are calculated every year to account for rising property values.

If adopted by local governments, the rates would produce property tax revenues equal to those earned this fiscal year, according to Tim O'Rourke, supervisor of Washington County's tax assessment office.

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If Washington County and the City of Hagerstown adopted the constant yield rate next fiscal year, which begins July 1, some residents in those jurisdictions would pay hundreds of dollars less in property taxes.

Washington County's constant yield rate for fiscal year 2009, at 87.8 cents per $100 of assessed value, is 7 cents less than the county's current property tax rate.

The City of Hagerstown's constant yield rate is 74.5 cents per $100 of assessed value, which is 5.3 cents less than the city's property tax rate.

A homeowner in the county whose property is assessed at $200,000 would save $140 in property taxes under the constant yield rate.

A city resident would benefit more because homeowners in Hagerstown pay both city and county property taxes. A city homeowner with a $200,000 assessed home would save $246 in property taxes next year under the constant yield rate.

For local governments, adopting the rate would reduce expected property tax revenues by millions of dollars.

County Administrator Gregory B. Murray said Washington County would have lost about $8 million in new property tax revenue this fiscal year if it had adopted the constant yield rate.

He said the county has not yet calculated what the revenue difference would be next fiscal year.

Several elected officials said Thursday that local governments have too much to pay for this year to make the constant yield rate feasible.

"I would love to do it, but I don't think it would be possible," Hagerstown City Councilman Lewis C. Metzner said.

Washington County Commissioners President John F. Barr said a backlog of school and road projects and a planned expansion of the Washington County Free Library would make lowering the property tax rate next year "difficult."

"We've had our socks blown off with these requests, and a lot of the groups are in desperate need," Barr said.

County Commissioner Kristin B. Aleshire on Wednesday said the constant yield rate does not consider inflation or the rising costs of fuel and materials.

He noted that the county lowered the assessment cap from 10 percent to 5 percent this year, which he said will result in an $8 million loss of revenue.

"We are decreasing the assessment cap and asking departments to hold the line on their budgets. To (adopt the constant yield rate) would actually be going backwards."

Barr noted that the county commissioners have also talked about capping assessments on nonprimary residences, which he said would help renters whose landlords are passing on the cost of rising assessments.

Earlier this month, Barr said there is "no real resolve" among the county commissioners to adopt the constant yield rate this year.

Commissioners Vice President Terry L. Baker and commissioners James F. Kercheval and William J. Wivell could not be reached for comment Thursday.

City councilwomen Penny M. Nigh, Alesia Parson-McBean and Kelly S. Cromer also could not be reached for comment.

City Councilman Martin Brubaker said he wanted to learn more about the issue before commenting.

If local jurisdictions decide not to adopt the constant yield rate, they must advertise their intent not to do so. They must also hold a public meeting between one and three weeks after the advertisement is published and not later than June 17, according to the state taxation department's Web site.

Staff writer Dan Dearth contributed to this story.




Rates by the numbers



Current property tax rates Constant Yield Rate Difference

City of Hagerstown

79.8 cents 74.5 cents 5.3 cents

Washington County

94.8 cents 87.8 cents 7 cents

* all tax rates are per $100 of assessed value

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