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Washington County zeroing in on new tax structure

November 14, 2009|By ANDREW SCHOTZ

WASHINGTON COUNTY -- Washington County is moving ahead with a plan to more fairly tax municipal residents.

The county commissioners voted 3-0 on Tuesday in favor of the concept of charging residents of Hagerstown and the towns lower taxes than residents in unincorporated areas, who don't fund two different local governments.

The new structure, known as a tax differential, will replace the tax rebate or setoff, in which the county returned money to the municipalities each year for overlapping services.

County Administrator Gregory Murray called the decades-old tax rebate "antiquated." The new system will cost the county money, but it's the right thing to do, he said.

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A memo by Debra Murray, the county's budget and finance director, says switching to the differential would cost the county about $600,000 in fiscal year 2010.

"With a tax differential rate the County can redistribute equity back into the tax structure for the citizen due to shifts, changes, and demands in government services to the public," her memo says.

Commissioners James F. Kercheval, Terry Baker and William J. Wivell voted in favor of the change on Tuesday.

Commissioner Kristin B. Aleshire abstained. He said he supports the new system, but wants to be sure Hagerstown and the towns have been briefed and know what their reactions are.

Commissioners President John F. Barr was absent.

The switch from rebate to differential is scheduled to come up Tuesday when the county commissioners meet with the city council.

Aleshire also wondered if the differential might be phased in over two years. Wivell disagreed, saying that would be overly complicated.

Hagerstown Mayor Robert E. Bruchey II said Friday that he would like to hear more about the differential formula. He said he's heard it might be based on Anne Arundel County's system, but cautioned that Washington County is different in that Hagerstown residents help pay down the county sewer debt.

While the rebate system compensates the city for its park and police services, Bruchey said he would like city engineering, planning and permits work to also be credited.

He said he's concerned the tax differential system could force the city to raise taxes to make up for lost rebate money.

Gregory Murray told the commissioners he sent the municipalities letters on Sept. 29, but didn't get specific feedback from them.

Three mayors The Herald-Mail contacted last week, including Bruchey, said they heard from the county about the differential concept. Two said they hadn't. Four others couldn't be reached.

Hancock Mayor Daniel A. Murphy said he received Murray's letter and also talked directly to county officials.

He said he agreed with the premise -- town residents shouldn't pay for services duplicated in the county -- and believes the change will benefit the town.

Other mayors were less sure.

Smithsburg Mayor Mildred "Mickey" Myers said she received Murray's letter and shared it with the town council, but hadn't heard any specifics.

"We really wanted to hear just a little more about it ..." she said. "If you were to ask me how it's going to work, I couldn't tell you."

Williamsport Mayor James G. McCleaf II and Funkstown Mayor Robert Kline said they hadn't seen Murray's letter and didn't know about the new differential system.

The mayors of Clear Spring, Sharpsburg, Keedysville and Boonsboro didn't return messages on Wednesday and Friday.

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