Keeping 5% Assessment Cap Will Cost County $2 Million

More Than 4 In5 Households Will Benefit

November 06, 1991|By James M. Coram | James M. Coram,Staff writer

Despite a growing deficit in the county budget, the County Council turned down $2 million Monday by voting, 4-1, to keep property tax assessment increases to 5 percent a year.

By placing a 5 percent cap on assessments, the county will, in effect, be granting an extra $2 million in credits to property owners. Had there been no cap at all, growing assessments would have swelled revenue by $3 million with no increase in the property tax rate.

County budget director Raymond S. Wacks told the council

that about 41,800 of the roughly 49,300 households in the county will benefit from the 5 percent cap.

State law requires counties to set an assessment cap at 10 percent or less. Last year, the council also agreed to a 5 percent ceiling.

County Executive Charles I. Ecker has said he favored the 5 percent measure because he believes assessment increases are a hidden tax. If additional revenue is needed, it is better to seek it directly, Ecker said.

State assessors re-evaluate property every three years. They assess it at full value the first year and adjust the figure upward for inflation the next two years. Theactual assessment is based on 40 percent of each year's full value.

After voting, 3-2, to reject a 10 percent ceiling, which would have affected 11,160 households, the council adopted the 5 percent cap, with Paul Farragut, D-4th, casting the lone vote against it.

Sydney L. Cousin, associate school superintendent for finance and operations, came close to advising the council to vote for a 10 percent cap.

Cousin said the council should "look carefully" at any source for revenue. "The school board has just reduced its budget by $4 million"-- $3 million at Ecker's request, $1 million in state cuts, he said."I encourage you to remember that if the state cuts additional funds, we'll have to cut further."

Council Chairman C. Vernon Gray, D-3rd, agreed that things look bleak for education financing, saying he had been told last week that another $250 million will be cut from state aid to the counties in 1993.

Everyone on the council agreed the county must increase revenue.

"The question is how?" Shane Pendergrass, D-1st, said. Pendergrass produced statistics showing that as the average assessed value of homes increased, the average sales price of homes dropped in the last two years.

"Do we increase the property tax rate" -- which the council increased 14 cents to $2.59 per $100 of assessed value this year -- "or do we let assessments rise?" Pendergrass said.

Darrel Drown, R-2nd, said he objected to letting assessments rise when so many people are being laid off from their jobs. "This is an appropriate time to look at the whole revenue stream -- how it grows," Drown said.

Drown said he is particularly concerned about what he sees as a mounting call for "nickel-and-dime" tax increases in the state sales tax, the state gas tax and the county portion of the state income tax.

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