Funkstown mulls property tax rate increase

October 13, 2009|By JULIE E. GREENE

FUNKSTOWN -- If the new property assessment values in Funkstown are down from the last ones, the Town Council will have to consider raising the property tax rate for the first time in at least 20 years.

On Monday night, town officials received a draft of a clean audit opinion for the fiscal 2008-2009 year. That good news was overshadowed by dim revenue forecasts.

Rodney L. Saunders, an accountant with McGladrey & Pullen, said Funkstown's budget is one of the stingiest he's seen as town officials have been fiscally responsible, so there's not a lot of options in cutting expenses.

Like other Maryland municipalities and counties, the town received a 90 percent cut in highway user funds this fiscal year.

Saunders said annual highway user revenue for the town had typically been $50,000 to $60,000. The town had $50,853 in highway user funds last fiscal year. Using that figure, a 90 percent cut would be almost $46,000.

In addition to that lost income, the town can expect declining income tax revenue as the economy has resulted in layoffs, pay cuts and bankruptcies, Saunders said.

Property tax assessments are expected to decrease, which would hurt property tax revenue, Saunders said.

Town officials should get the assessment results early next year.

The town's property tax rate is 22 cents per $100 of assessed value. For a home with a $100,000 assessed value, that's $220 in annual property taxes just for the town, officials said.

On top of that, Funkstown is expecting a water rate increase from the City of Hagerstown, Saunders said.

Town officials will need to consider all their options to make up for expected lost revenue, Saunders said.

Assistant Mayor Paul Crampton Jr. said one of the first things the council should look at in making cuts is what the town is doing with the Washington County Sheriff's Department. About three years ago, the town started paying a deputy to work so many hours a week in town, Crampton said after the meeting. He did not know how many hours that was.

Before Saunders made his presentation, Josh Russin from the Governor's Office of Community Initiatives, told town officials that another $300 million was expected to be cut from the state operating budget in about a month.

In reviewing the draft audit with the mayor and Town Council, Saunders said the town had a $24,707 general fund surplus. But the town has a $136,312 deficit in its water and sewer fund from costs associated with a new wastewater treatment plant that went online this year.

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