Moyer sees no tax cut for '07

Capital expenses, fuel costs preclude reduction, she says

April 12, 2006|By NIA-MALIKA HENDERSON | NIA-MALIKA HENDERSON,SUN REPORTER

Noting increased fuel costs and overdue capital improvements, Annapolis Mayor Ellen O. Moyer proposed a fiscal year 2007 budget that for the first time in her tenure leaves the property tax rate unchanged.

The proposed $68.6 million operating budget, which represents a 10 percent spending increase over the current fiscal year, includes salary increases for public works employees and the addition of five police officers and as many as 12 firefighters.

Moyer, who proposed last year an election-year budget that reduced the property tax rate by 2 cents, said in her State of the City address Monday that given budget constraints, a similar reduction was not possible next year.

"We face fiscal challenges," she said in her statement. "We are not alone. Local governments nationwide are experiencing budget shortfalls."

At the proposed tax rate of 56 cents per $100 of assessed value, the owner of a $300,000 house would pay $1,680 in taxes, if the assessment stayed the same. However, with rising assessments - they recently increased an average 27 percent for a single year in the city - homeowners can expect to see higher tax bills.

Assessment increases for tax purposes are capped in the city at 10 percent a year, the state maximum, so the owner of a $300,000 house could pay taxes on $330,000 - or $1,848. That amounts to a $168 increase.

Like other executives around the region, Moyer said the city is wrestling with rising costs this year.

With fuel and electricity costs going up by 30 percent, the city will have to spend an additional $750,000 for refuse collection, storm management and transportation, according to the budget.

The city's capital improvement plan includes $1.6 million for repairs to bulkheads at City Dock, $500,000 for vehicle improvements and $600,000 for water and sewer repairs.

Moyer said the city needs to pay for a new water tower and an addition to Police Department headquarters.

"The bills have come due for capital works projects," said Moyer, a Democrat. "These are items that are expensive and necessary."

The mayor said that raises for city employees - 3 percent - are needed to retain employees and keep Annapolis competitive with surrounding areas.

The raises would cost the city about $1 million.

Council members said they had not reviewed Moyer's proposed 600-page budget, but that they would look for ways to trim costs.

"I think most people expected the tax rate to go down," said Alderwoman Julie M. Stankivic of Ward 6, who is in her first year in office. "We're going to look to see if we can come up with enough savings to reduce the tax rate."

Stankivic, an independent, said that lowering the property tax rate by a penny would require finding $420,000 in savings.

However, given the necessary expenditures on capital projects and public works, that will be difficult, she said.

"We want to make decisions that are in the best interest of the city in the long run."

Alderman Josh Cohen, an Eastport Democrat who represents Ward 8, said he was pleased that the budget included funds for additional police officers. He said that more officers would mean an increased police presence on the city's streets and expanded specialized operations. The cost of the additional officers' salaries would be $185,000 a year.

Cohen, who sits on the finance committee, said a review of the budget is scheduled for April 21.

Concerned about rising property tax bills, Cohen in February suggested requiring the votes of six city council members for property tax revenue to increase by 5 percent or more. Such revenue caps can trigger tax-rate reductions.

He took a more cautious approach Monday.

"All of us are going to be looking at ways to pare down the budget," Cohen said. "But there's not a lot of wiggle room at first glance."

A public hearing will be held April 24, and a budget must be adopted by the council by June 30.

The fiscal year begins July 1.

nia.henderson@baltsun.com

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