SALISBURY – At a public hearing regarding the mayor’s proposed budget, which includes an increase in the tax rate, a taxpayer’s concerns over having to pay for duplicated services between the city and Wicomico County were heard.
“The budget this year is dominated by the fact that our assessable base has dropped considerably this year,” City Administrator John Pick said. “It has been dropping slowly for the last few years but this year we took a big hit.”
Pick furthered, Salisbury’s assessable base has dropped 22.1 percent since the recession began and is currently around 2007 to 2008 levels.
Department heads and city staff have cut $1.47 million from the Operating Budget since 2010 to accommodate loss in revenue, such as from sources of income tax, highway user tax, building permit fees and others.
In addition, department heads and city staff has generated $5.3 million in total cost savings over this period of time due to furloughs, frozen positions, vacant positions and other cuts.
This year the city is facing several significant increases in costs, such as $700,000 increase in health insurance; $650,000 increase in retirement costs; and $755,000 in police salaries that were agreed to last year.
Mayor Jim Ireton has included funds in the budget to allow for a 2.2-percent increase in pay for all city employees except for those who have received a pay raise. This amounts to $293,000.
“We are slowly emerging from the economic down turn,” Pick said. “The mayor’s priorities remain unchanged. They are law enforcement, emergency medical services, neighborhood integrity, infrastructure and downtown revitalization.”
In order to close the budget gap caused by the loss in revenue during FY 2013, Ireton is proposing to raise the tax rate to the constant yield, which will bring in the same amount of revenue last year. The proposed tax levy is .884 cents per $100 of assessed valuation of all real property, and at $2.21 per $100 of assessed valuation for all personal property.
“Our records indicate approximately one half of all property owners will see a drop in their tax bills from the city due to the assessments dropping, and one half of property owners will see an increase,” Pick said. “Due to a large surplus in the water and sewer fund, the mayor proposed a decrease in water and sewer rates of 6.5 percent. Our goal is to balance the approach to offset the increase in taxes with a decrease in water and sewer rates.”
The only member of the public to speak was city resident Kay Gibson, who stated her opposition against the tax rate being increased once again.
“I understand the city is in financial trouble but I think the city needs to understand that the people who pay the property tax, the homeowners, is also running into financial problems,” she said. “We have seen a decrease in the value of our homes significantly with an increase in our taxes … the city employees need to understand that the increase in health insurance taxes and health insurance costs that the city picks up is indeed a benefit to them and part of their salaries, so they are getting an increase.”
Gibson acknowledged pages worth of Salisbury residents who are unable to pay their taxes. In return, the city has a growing number of vacant properties on their hands.
“So we have increased our costs, we have people who can’t pay the costs, houses that won’t sell because the property taxes constantly go up and it is just not you it’s also the county,” she said. “We get double taxed, so what are we going to give up … you just need to go through and look at every single item carefully and start cutting. People can’t afford to pay you more.”
Once the public hearing had come to a close, Councilwoman Laura Mitchell stood up for the proposed budget, stating the average increase in taxes will come to $2.75 per week, which is less than the cost for a cup of coffee.
“I know that every little bit counts and I know that there is no such thing as a painless increase but our employees and our vendors are all experiencing the same issues,” she said. “There are a number of priorities we are looking at in this budget, and they are all competing by the bare nature of it and it really is rob Peter or pay Paul. We just try to strike a balance and it is never going to make everybody happy but we are doing the best we can ….”
Council President Jacob Day acknowledged citizen concerns over having to pay for a duplication of service between the city and county.
“As city residents we are all asked to bear extra costs for services provided within the city limits and there are some that the city definitely feels there is an overlap,” he said. “Over the upcoming years we will address that overlap, and it is something we have and will continue to talk to the county about … I think there are services provided by our city that are incredibly important and we can’t do without, and I think a lot of people would agree with that.”
Councilman Tim Spies is also annoyed by the fact services are being duplicated.
“I want to assure everyone that this is an ongoing dialogue between the city and county,” he said. “We haven’t ironed anything out at this point but it is not a dead issue. I have talked to the county executive and we have come to the point where we are talking about what we can do to cut costs.”