SNOW HILL — With a few vocal exceptions, Worcester County residents told the County Commission Tuesday that they would be willing to take a tax increase as long as the money went towards education.
The County Commissioners took this with a grain of salt, however, especially since there are still a number of potential budget pitfalls in the road ahead, including the continued uncertainty of state mandates and the fact 44 commercial properties in Ocean City are currently appealing their values.
All in all, things are looking bleak and, according to Commissioner Virgil Shockley, most people don’t realize just how bad finances are.
“You’re not elected to stand up and tell people, ‘things are going to Hell, get the parachutes,’” he said.
Some members of the public are taking a more optimistic, if pragmatic, view of the state of things, with several offering to pay higher taxes if that’s what it took to support county schools.
“We would be happy to pay a little more of our fair share,” said Berlin resident Dawn Scher on behalf of herself and her husband.
Resident Karen Bush agreed and underlined that strong schools did more than just improve the lives of students.
“When your schools are excellent, your community is excellent,” she said.
Staring down the barrel of a $17 million gap shortfall in this year’s proposed budget, due mainly to the loss of nearly $11 million in property tax revenue due to the most recent assessments dropping Ocean City property values, a property tax increase is “inevitable” this year, in the words of Commission President Bud Church.
But the message from citizens this week was that a tax increase would not be considered the end of the world and is tolerable, as long as the money is used for schools.
During the public budget input session Tuesday, the commission was barraged by public appeals to support the Board of Education this year in the form of teacher and faculty raises.
“Our teachers, our staff are truly dedicated,” said Christiana Hulslander.
Variations of those comments were echoed by nearly two dozen speakers at the session. Nearly all of them urged the commission to fully fund Worcester schools. Several, like Scher, suggested a tax increase to do so.
However, there were some voices of dissent.
Elle Diegelmann warned the commission that the budget cannot be fully balanced on the backs of tax payers and any attempt to do so would just “dry up” people’s resources, leaving the county in jeopardy in the long-run.
“This equation cannot work,” she said.
Diegelmann’s solution for the commission is to double-down on efforts to curb the shifting of traditional state responsibilities to the county level. Things like teacher pensions costs, which have always been handled by Annapolis, are currently in the process of trickling down to individual counties. Diegelmann advised the commissioners to hold state delegates, Gov. Martin O’Malley and his administration’s “feet to the fire” and demand that they stop the transfer of unfunded state mandates and costs.
While the commission agreed wholeheartedly that the state was being grossly unfair with their actions over the past three years, the officials have repeatedly stressed that Worcester does not have the clout or the votes to reign in Annapolis. The Eastern Shore in general, according to Shockley, more or less finds itself at the mercy of a state government that he feels is needlessly reckless and irresponsible.
“We [the county] don’t have the spending problem,” he said.
Shockley compared the fiscal condition of Worcester to a car that’s skidded off the road and is stuck hanging over a precipice.
“Well, the state just came along and kicked the car off the cliff,” he said.
Resident Carol Fishel asked the commission to think about the practical impacts of a tax increase on citizens, especially those living on fixed income like seniors.
“We are the ones who are paying for the schools with our taxes,” she said.
Regardless of what’s happening at the state level, Fishel emphasized that at the end of the day locals would be the ones with lighter wallets and that the commission’s responsibility is to guard against that damage as much as possible.
This year, the county is considering a 8-cent property tax rate increase, which would raise the rate from 70 cents per $100 of assessed valuation to 78 cents. It should be noted that, due to falling property values and therefore property tax, the rate would need to be raised to 77 cents just to achieve constant yield. With constant yield, Worcester would only be bringing in exactly as much revenue through property taxes as it did last year.
By going up by 8 cents on the property tax rate, the county would bring in an additional $1,151,057.
However, Shockley pointed out that property tax revenue is still not guaranteed even this late in the year as a result of a new wave of commercial property appeals in Ocean City.
According to records obtained from the State Department of Assessments and Taxation, 44 commercial properties in Ocean City worth more than $311 million three years ago are appealing their property re-assessment, with most attempting to earn a lower value. The proposed value for those properties after the last assessment comes in at almost $298 million. If the appeals result in lower values, the owners would pay considerably less property tax, further hurting the county’s bottom line.
Some of the biggest properties appealing their recent assessments include the 65th St. Holiday Inn, 54th St. Quality Inn, 45th St. Village, Fenwick Inn, Phillips Crab House, Ocean Plaza Mall, 120th St. Food Lion shopping center, the Princess Royale, Seacrets and the Hilton, which actually saw its assessment increase from $59.6 million to $60.4 million.
If the appeals are successful in getting lower values than proposed, exactly how much that will cost Worcester in tax revenue depends on what the presumed new tax rate will be, but a conservative estimate from County Finance Officer Harold Higgins had the money lost around $100,000, while Shockley guessed it could be closer $250,000.
Any revenue lost through the appeals process would widen the current $17 million budget shortfall and would need to be addressed through cuts or increased revenue, usually taxes.
Commissioners like Shockley and Madison Bunting have been vocally against jumping taxes too high this year.
“We advertised a 8-cent [increase],” said Shockley. “I would not vote for 8 cents.”
While the majority of speakers at this week’s input session were accepting of a tax increase, Church noted that, in his estimation, 90 percent of speakers were either parents of students or linked to the school system in some way, meaning that they might not represent the opinions of everyone in the county.
“They have a vested interest in their students,” said Church, who stressed that it wasn’t a bad thing.
The commission will have two budget work sessions this month on May 22 and 29. On June 5 they are scheduled to adopt a final FY2013 budget.