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No tax hike in proposed Hagerstown budget

$1.05 million shortfall eliminated by adjusting revenue estimates, expenditure reductions

April 04, 2013|By HOLLY SHOK | holly.shok@herald-mail.com

Although city staff in January suggested a property tax increase to make up a $1.05 million shortfall for fiscal year 2013-14, an increase was not included in the city of Hagerstown’s proposed budget. 

Michelle Burker, the city’s director of finance, said the budget maintains the current property tax rate of 78.8 cents per $100 of assessed real estate values — a rate that has been in effect since fiscal year 2008-09.

“We were able to eliminate the $1.05 million shortfall by adjusting revenue estimates and making certain expenditure reductions,” Burker said Wednesday in an email. 

In January, the preliminary general fund revenue estimate was $36,867,244. The proposed general fund revenue detailed Tuesday during a meeting at City Hall reflects an increase of $967,532, for a total of $37,834,776 — a 2.5 percent increase over the current year revenue revised budget of $36,923,088.

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Burker said the increase in general fund revenue stems from $100,000 in added state aid for police protection; a $60,000 revenue increase from the Safe Speed for Students Program; a $90,000 increase in real estate tax revenue estimate; and $250,000 added to the water fund dividend.

In addition, there is $243,000 in additional revenue related to a hiring grant from the U.S. Department of Justice’s Office of Community Oriented Policing Services (COPS); $109,000 in increased income tax and other state shared revenue; and a $115,532 increase in other miscellaneous revenue adjustments based on historical trends.

General fund expenditures were decreased by $87,009 from January estimates. The proposed budget reflects general fund expenditures at $37,834,158 — a 2.9 percent increase over the current fiscal year.

The decrease from the January estimate reflects a decrease of $400,000 in half year of contingency for employee pay adjustments; a $250,000 increase in debt service for capital projects; a $250,000 decrease in capital outlay operating expenditures; a $275,000 increase in COPS hiring grant expenditures; and a $37,991 increase in other miscellaneous expenditure cuts based on historical trends.

Burker presented Mayor David S. Gysberts and the five-member city council with the proposed budget Tuesday. Gysberts said the review was intended to allow council members to absorb the information.

Further discussion will be held during upcoming work sessions focused on the budget, he said. The finalized spending plan is due in May.

“We are maintaining our current operating levels, we’re continuing to operate with less in these difficult economic times. We’ve done that through cost containment, expenditure reductions and management of our unfunded positions,” Burker said, noting the city continues to operate with 27 unfunded positions.

The Capital Improvement Projects fund is increasing by $9.4 million, which is related to plans for a new multiuse stadium as well as downtown redevelopment, to total $15,560,268, Burker said.

The proposed budget also includes money for a cost-of-living wage increase for city employees, which has not been granted in four consecutive fiscal years, with a midyear pay adjustment anticipated for the upcoming fiscal year and a full-year adjustment in the fiscal year 2014-15 projection.

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