Residents of 4 counties face 'piggyback' tax rise Three boost rate to state maximum of 60 percent

July 04, 1993|By William Thompson | William Thompson,Staff Writer

Beginning in January, wage earners in four Maryland counties will pay higher local income, or "piggyback," taxes to support government services not funded at the state level.

Officials in St. Mary's, Somerset and Wicomico counties raised local income taxes from 50 percent of state tax liability to 60 percent. That amounts to a 20 percent increase in the tax rate.

In Queen Anne's County, commissioners raised the piggyback tax from 50 percent to 55 percent of state tax liability, amounting to a 10 percent increase.

The new local tax rates were approved during budget deliberations in preparation for the fiscal year that began Thursday.

Under state law, county officials and Baltimore City must impose local taxes of no less than 20 percent and no more than 60 percent of the amount that a taxpayer owes the state. People are taxed in the county where they live, not where they work.

With the latest three counties boosting their rates, six of the state's 23 counties have imposed the maximum level since the piggyback tax was authorized in 1967.

In most cases, the 1994 rates were adopted to cover projected spending increases on such budget items as solid waste disposal, county government, employee raises, education and law enforcement.

In Queen Anne's County, for example, the three-member commission had to boost the piggyback rate to balance its 1994 budget for the fiscal year that will end next June 30. The new budget of $34.4 million, a $1.4 million increase over last year's, includes a 3 percent pay raise for all county and board of education employees.

Joe Zimmerman, Queen Anne's finance director, said the piggyback increase should raise $468,000 in additional revenue.

County Commissioner William V. Riggs III said he hoped that the rate would be temporary.

"The only reason we did it was because we were up against a wall with all the state cuts," he said. "We held the line last year but couldn't do it this time.

Somerset County Administrator Charles Massey said that local officials raised the piggyback rate in part to help defray costs of a new landfill.

He also said that because Somerset receives "disparity grants" -- extra state funding because it is one of Maryland's poorest counties -- officials felt compelled to collect the maximum amount of local taxes so its residents would bear their share of the tax burden.

Since 1967, the state's counties have authorized 53 increases and six decreases in local tax rates, according to the state comptroller's office.

In St. Mary's County, the piggyback increase is the first to affect county residents since 1967.

The lowest local tax rate in the state is in Worcester County, where the piggyback rate is 30 percent of state tax liability.

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