With Numbers Holding Steady, Berlin Tax Hike Unlikely

BERLIN- Though not official, the Berlin Town Council indicated this week that a tax increase in their upcoming budget is highly unlikely. With only minor variations from last year’s budget, the FY15 proposed budget appears to be in a comfortable spot and is currently balanced. There is only a 10-percent variance between last year’s budget and the FY15 proposed at this point or about $457,910. The expected revenue and expenditures for FY15 stand at $4,933,641 though the council still has other outlay expenditures to consider and thus those numbers could be altered between now and a final budget later this spring. However, even if there is a change the council was clear this week that they are universally opposed to a property tax increase.

“Let’s see how we fare this year and then let’s take a look at the budget next year,” suggested Mayor Gee Williams.

Property tax revenue is Berlin’s main source of funding. It looks to hold steady with last year’s numbers with $2,520,600 projected for FY15, only a $600 increase from last year. This isn’t the case in many other parts of Worcester County where decreasing property values hamstrung other municipal budgets.

“My understanding is Ocean City is taking another hit,” said Williams. “Not as severe as they thought, but still pretty severe and in the southern half of the county the bottom dropped out.”

Berlin, however, in the second year of the standard three-year property reassessment cycle, isn’t going to see any variation from last year and in fact could be poised to see property tax revenue increase in the near future.

“We are the same number of $2.5 million with the same assessment traits and we are in the second year of assessments so we have a whole full year to go before they reassess properties and then we might see an increase if we have more building than not in this year,” said Natalie Saleh, director of Finance.

The mayor agreed and pointed out that if the tax base grows, the town government can continue to make improvements without having to raise taxes.

“What our goal and our hope and our efforts will be is to try to make sure that we grow the tax base by some measurable amount during the next three-year cycle,” he said. “Because some of those things you can’t just approve it, build it and then start collecting revenue.”

Declining property values in the county are a serious issue and Williams wished other municipalities the best of luck but admitted he was glad Berlin is in a good spot.

“It’s unfortunate that it’s happening to our neighbors but there are some benefits for all of the things that have been done,” he said. “I think we have an opportunity to grow our tax base and by leaving it where it is I think it will help that. “We’re going our own way.”

While Williams definitively signaled that he was not in favor of a property tax increase, councilmember Paula Lynch decided to take an impromptu straw poll to touch base with the rest of the council. With councilmember Elroy Brittingham absent, no one on the council made a clear indication that they favored a property tax increase.

“We’re all saying the same thing,” said Lynch.

The current property tax rate is $.68 on every $100 of value. Berlin decreased the tax two years ago to reach the current rate.

Along with the unlikelihood of a tax increase, Berlin’s proposed budget is line-for-line very similar to last year. The most notable departure from that is in anticipated revenue from Main Street tourism, which is expected to increase by 1,300-percent from $5,000 in FY14 to $70,000 in FY15.

In recent years the town has begun to double-down on tourism and its Economic Development Department. This year saw Berlin winning Budget Travel’s Coolest Small Town in America competition. A significant portion of the expected revenue increase can fairly be attributed to that victory as the national contest has paid big dividends for small towns in the past and Berlin has already leapt to capitalize on the title in all of the town’s advertising.

However, Williams noted that economic development and the Main Street program have become strong in their own right and are at least partially responsible for Berlin’s recent growth, especially downtown.

“This part of the budget has been a great investment. There’s no doubt that some of this stuff that has happened on Main Street would have happened,” said the mayor, “but an overwhelming majority of it would not have happened without the economic development effort of the last few years.”

Leave a Reply

Your email address will not be published. Required fields are marked *

*

HTML tags are not allowed.