New Business Needed In Wicomico To Calm Economic Woes

SALISBURY — A new strategy is needed to get Wicomico County out of some rough economic waters, according to a financial sustainability study discussed this week.
Conducted by the Sage Policy Group, Inc., the report argues against either tax increases or spending cuts and instead urges the county to find ways to become more attractive to business and to improve quality of life for residents.
“They analyzed our revenue trends. They then studied our tax capacity relative to our tax effort,” Wayne Strausburg, director of administration, told the Wicomico County Council Tuesday.
Wicomico “finds itself in an extraordinarily difficult position,” began the report’s summary section. Despite having the highest income tax allowable under state law and being fourth out of 24 in property tax collection, once county and municipal taxes are considered, the county still struggles with funding. Because of this, there has been an increased reliance on state and federal support to fund things like county education instead of using local money.
“The implication is that Wicomico County has already exhausted much of its capacity to raise revenue through taxes,” read the report. “There are also limits to future tax increases.”
Though more funding is needed, taxes are already too high, according to members of several focus groups that Sage met with. One tax in particular, a tax on business inventory, proved especially unpopular.
“Stakeholders unanimously agreed that the county should not raise taxes,” read the study. “Many believe that the inventory tax should be eliminated or adjusted.”
At this point in reviewing the report, Strausburg pointed out to the council that, compared to neighboring counties like Talbot and Worcester, Wicomico struggles with a lower assessable property base per capita. Wicomico weighs in at a rate of $768, compared to $2,619 for Talbot and $3,658 for Worcester.
Councilman Bob Culver suggested that the discrepancy in values could be partially explained by Wicomico’s farmland being undervalued. However, Strausburg reminded the council that Talbot and Worcester also have a lot of agriculture-zoned land and thus should be an “apples to apples” comparison for Wicomico, in his opinion.
Even with tax worries, residents oppose spending cuts.
“At the same time, additional spending cuts appear roughly as problematic,” noted the report. “If anything, there needs to be greater investment in quality of life, human capital formation and community appearance.”
Improved aesthetics and quality of life would not only help residents but would appeal to new businesses as well. An influx of fresh private investment is the only solution Sage could find to bring much needed revenue into Wicomico without cutting spending or raising taxes.
“The ultimate solution is to radically increase the level of private sector investment and grow the local economy and associated tax base,” they reported. “Of course, this will require a regional approach, including partnerships with regional and state economic development agencies, such as the Maryland Department of Business and Economic Development, among others.”
Making the county more attractive to business won’t be an overnight fix. Sage suggested that a good early step would be to begin to reduce subsidized housing in Salisbury, particularly downtown.
“For downtown Salisbury to be successful, it will need to have a more targeted focus. Community leaders should emphasis arts and entertainment, and should focus on keeping people downtown after work. Participants cited Berlin, Md. and Harrisonburg, Va. as examples worthy of emulation,” the report read.
Increases in crime and political infighting were two more things that Sage found troubled residents. The increase in recent years of subsidized housing was one perceived cause of the uptick in crime, according to the report. The occasionally hostile political climate was blamed for a “lack of transparency in respect to spending,” in Wicomico.
Other recommendations made by Sage include eliminating the inventory tax for businesses that relocate to Wicomico and phasing the tax out over the next five years for all existing business as well. Wicomico’s infamous revenue cap could also use some tweaking, according to the report. In order to keep up with inflation it should increase by either 2 percent or by the Implicit Price Deflator (IPD) for state and local consumption expenditures.
The study reinforced the need to make Salisbury more accessible and attractive and suggested a small businesses incubator downtown as well as more staff for local economic development agencies. The elimination of duplicated services between county and municipalities was also advised.
The council plans to use the findings of the study in the future as part of long-term development in Wicomico County.

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