Carroll officials reveal $244.7 million budget plan

0.2% personal income tax increase among proposals

April 18, 2003|By Mary Gail Hare | Mary Gail Hare,SUN STAFF

The Carroll County commissioners unveiled a $244.7 million budget yesterday that proposes a slight increase in the personal income tax and several provisions that are expected to make growth pay for itself.

The plan includes money for two new schools and a new senior center in South Carroll, the county's most populous area. It ensures Carroll's commitment to agricultural preservation and $2 million to road repairs.

The effect of looming state budget cuts could remain unknown even when the commissioners adopt the budget late next month. Carroll could escape without much damage from state cuts this year, but 2005 could bring problems.

"We have some wiggle room this year," Commissioner Dean L. Minnich said. "But next year will be really tough. We will have to raise taxes or come up with other sources of revenue."

The proposed 0.2 percent increase in income tax would generate about $2.5 million in revenue in fiscal year 2004, which begins July 1. Because the tax is computed on the calendar year, it could add as much as $5.3 million next year. The average taxpayer would see about $90 more on the annual tax bill.

"The idea of the increase will probably bother people more than the actual expense," said Ted Zaleski, county director of management and budget.

The average homebuyer would pay about $660 more in settlement costs because of the $1.50 per $500 increase in the recordation tax, which the proposed budget sets at $5. The increase, paid by the buyer and the seller, would add $3 million to county revenues.

The commissioners will also ask the legislative delegation for authority to impose a 1 percent transfer tax on all real estate transactions next year, a proposal that would add about $5 million in annual revenue.

The commissioners could have difficulties getting the proposal through the 2004 session. Sen. Larry E. Haines, leader of the Carroll delegation, said yesterday that he would oppose the measure.

"I want to hold the line on taxes," said Haines, owner of a Westminster real estate company. "We are running into a cycle of slow growth and we won't need an increase."

Carroll, like many other Maryland counties, has seen a tremendous increase in property assessments, which Haines called "built-in increases for local governments." No other changes are necessary, he said.

The recordation and transfer taxes are ways to fund the infrastructure demanded by growth, officials said. The commissioners insist that growth must pay for the additional schools, roads and utilities it demands. They are studying costs associated with development review, permits and impact fees to determine if the county fees are sufficient.

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