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From the Desk of
County Councilman Phil Dacey

(6/2020) The Frederick County Council took up the issues of the County’s budget and tax rate in May. Budgeting sounds dull, but in reality it is one of the main functions of your County Council. I voted against the budget and voted to reduce the property tax rate and let me tell you why.

This year, the budget was set against the backdrop of the biggest economic crisis in a century. There are more people unemployed now than at any time since the Great Depression, and there are even more who have taken an economic hit whether it is furlough, reduced hours, or income reduction.

With that backdrop, you might expect a county budget that either decreases in overall money spent or at the very least, a level funded budget that does not increase. Unfortunately, the budget that was presented and adopted does no such thing. It fails to recognize that many of our county’s residents have had dramatically changed economic circumstances.

The budget in fact, increases over last year’s budget by nearly $30 million and represents about a 4.4% increase. By context, last year’s increase was about $34 million representing a 4.7% increase over the prior year’s budget. Even just looking at these numbers, this budget is a business as usual budget.

Worse, the Council voted to allow the same property tax rate as last year. Because this tax rate is applied to the value of a property and Frederick County is doing well, what that means is virtually every property owner is paying more real dollars in property taxes every year, regardless of how much money one has or makes.

All properties in Frederick County are re-assessed every 3 years, and generally in a county like Frederick, they increase in value. If the same tax rate is applied to a property that has increased by 50%, then the property taxes that a citizen will pay on that property will also increase by 50%. Unlike the income tax, (which also remains constant but people pay more actual dollars as their income increases) there is not necessarily a corresponding increase in the property owner’s household budget, simply because their home value increased on paper. This means that the amount of total dollars that a household must pay toward property tax generally increases every year unless the County Council acts to adjust the property rate downward.

Reducing the property tax rate or maintaining the "constant yield" is affordable. The County Council has received numerous communications on this front, many of which are strikingly alarmist saying that reducing the property tax rate to maintain the same amount of revenue as the prior year is equivalent to ‘starving the county of funds.’ The facts tell a different story. This year, maintaining the ‘constant yield’ and lowering the tax rate would have reduced potential revenue by $8.5 million in the $665 million proposed budget. This would not have necessitated any actual ‘cuts’ in the county budget. The county budget this year is to increase by about $28 million. So even adopting the constant yield this year, allowing families the economic certainty in these difficult times of not having to pay more of their household budget toward taxes, would still afford the county about a $20 million budget increase.

Unfortunately, the majority of the Council did not agree with me and the budget and tax rate were adopted. However, in this year especially, I will be continuing to look for ways to lower the tax burden on families that are economically struggling.

 

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