Add Taxes To List Of Increased Expenditures

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Everything is going up these days, and we can more than likely add the cost of owning property anywhere in Worcester County to that list, which includes electric and cable bills, grocery store essentials, gasoline, education, movie theater tickets, postage, drinks at watering holes and meals at restaurants.

Local governments are now approving their budgets for the next fiscal year. In recent months, they have deliberated with their respective staffs and put together a spending plan outlining the next 12 months. Once they balance the amount of revenue coming in with the necessary expenditures, a budget is adopted and becomes the guide for the next year. Although each individual government is different, from a local perspective, the end result of this process is property owners will owe more money to government next year than they did during the current year. Everything is going up.

The County Commissioners, Berlin Mayor and Council and Ocean City Mayor and Council are adopting budgets that center on increased revenue, thanks to elevated property values, and expenditures. We would have preferred to see the expenditures decline and allow for the tax rates to be decreased in all these cases. In a day when everything is tight, it would have been a responsible thing for government to lessen the burden on their constituents.

In Ocean City, elected officials did the best job of helping taxpayers, decreasing the property tax rate from 41 cents to 39.5 cents per $100 of assessed valuation. Some more good news came this week with the announcement that rate would be dropped even further to 38 cents, thanks to more county grant money than expected. However, the resort is still going to be spending much more money this year than last, and much of those funds, $4.7 million, will come from property owners based on their land valuation, which increased 16 percent on average and cumulatively topped the $11 billion mark.

In Berlin, officials are keeping the tax rate steady at 73 cents per $100 of assessed valuation. That rate is 8 percent higher than the constant yield rate and will bring in $200,779 in new property tax revenue. Surely, Berliners could use some help from their government, but the town has a serious debt issue, leaving officials’ hands tied as far as reducing taxes.

On the county front, the commissioners are keeping the same tax rate as well so most property owners will be paying more to the county in taxes. When the county decided to keep the same 70-cent tax rate, they were faced with cutting $13.1 million in proposed expenditures. Although the rate is significantly higher than the constant yield, the county points to the fact its Homestead Tax Credit has been lowered to 3 percent to help resident property owners. That’s a good deal for resident property owners, who at least will have the impact of their rising assessments spread out over three years. The same cannot be said those who have second homes around here.

When governments keep their tax rates above the constant yield level, the mark where governments get the same amount of revenue as the year prior, they are effectively raising taxes because generally assessed property values increase each year. There are instances when it declines, but assessments largely go up each year, particularly in this coastal region. That’s good news if a property owner wants to sell, but only means more money is coming out of their pockets and going to government in all other cases.

The bad news is much of this is inevitable. In many cases, elected officials have little recourse as far as cutting expenses. An argument can be made there should be no salary increases for public sector employees this year due to the severe economic issues. However, that’s never going to fly. How can a commissioner not give a slight increase to a teacher’s salary? Furthermore, if a teacher is getting a salary increase, the county’s dump truck driver should also be entitled to one. It’s about fairness.

Coming up with budgets everyone will bless is an impossible feat. Nobody will ever be happy – that’s a certainty with balancing a budget. That’s actually how to judge a budget as a success if some folks are content and others irked. We fall somewhere in between as we do think this would have been a good year to consider adopting the constant yield rate to give ratepayers a break.

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