Arundel may see property tax cut

Projections show revenue increasing faster than allowed by county law

Budget to be unveiled Wednesday

April 29, 2002|By Lynn Anderson | Lynn Anderson,SUN STAFF

Anne Arundel County budget office projections show that property tax revenue increases might exceed those allowed under a voter-approved tax cap, raising the possibility that the tax rate for homeowners in the county might be cut.

County Executive Janet S. Owens said she would not reveal whether she plans to propose a tax cut until Wednesday, when she is to submit her 2003 budget to the County Council.

But budget officials say the current property tax rate of 96 cents per $100 of assessed value might be reduced for the coming budget year.

"That's a safe assumption," said Raymond M. Elwell, assistant budget officer.

The property tax rate was last cut four years ago by County Executive John G. Gary Jr., a Republican who was defeated by Owens, a Democrat, in the 1998 general election.

Under the tax cap passed in 1992, the county's annual revenue from property taxes cannot grow by more than the annual rate of inflation or 4.5 percent, whichever is lower. Based on recent calculations, property tax revenue in the fiscal year that begins July 1 cannot exceed about $360 million, said Budget Officer John R. Hammond.

Low inflation and increased assessments of the value of many properties in the county contributed to the projected increase in tax revenue for the county, said Hammond. He has been meeting with Owens to discuss ways to satisfy the tax cap law that might not include a cut in the tax rate, such as creating new tax credit programs or bolstering existing ones.

At budget time last year, Owens considered proposing an increase in the tax rate to pay for school maintenance and employee contracts, but she held off.

Two years ago she proposed a 4-cent increase in the rate, the first increase since 1996. The increase was approved by council members who agreed with Owens that the extra revenue was needed to pay for raises for police and fire employees and to help clear a backlog of repairs to schools and roads.

"We were losing qualified employees in public safety to other counties because we were not meeting the salary ranges," council member Daniel E. Klosterman Jr., a Millersville Democrat, said Wednesday. "The [tax increase] was easier to accept because of that."

Owens' decision not to raise the tax rate last year was criticized by state Sen. Robert R. Neall, a Davidsonville Democrat and former county executive, who called it irresponsible in light of mounting government costs.

About $7 million in new tax dollars would have been generated by a rate increase of 1.8 cents, the most allowed under the tax cap at that time.

It is unlikely that the tax cap would be altered or voted down by residents, said Klosterman.

Two years ago, some residents sought a change in the county charter that would have altered the cap by limiting revenue growth to the higher - rather than the lower - of the two measures of inflation-rate increase and 4.5 percent. The drive failed to attract sufficient voter support to place the issue on a ballot.

"It won't go away," Klosterman said. "No one will ever come in and say, `Tax me more.'"

After Owens introduces her budget, the last of her four-year term, the council will hold a series of hearings with department heads to discuss their budget requests.

Public hearings have been set for Thursday and May 6, 8, 13 and 20. Final deliberations and a vote by the council are set for May 23.

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