SNOW HILL – Local homeowners could see an increased property tax bill in the 2010 calendar year after county staff suggested increasing the homestead tax credit later this year.
No changes would be made to the current tax bills due this summer.
Property tax revenue will plunge $6 million in fiscal year 2010, which begins in July 2009.
Assessed property values in Ocean City decreased in the recent round of reassessment, and 40 percent of Worcester County’s property tax revenue is generated by Ocean City property.
“The decrease in assessed values is something this county hasn’t seen in modern times,” said Worcester County Treasurer Harold Higgins.
By law, the homestead tax credit cannot be changed until the fall.
“You have to do it almost nine months in advance. It’s too late to do anything this year,” said county administrator Gerry Mason. “It’s something that should probably be considered for FY 11.”
The Worcester County homestead tax credit stands at 3 percent and was lowered from 5 percent a few years ago. The maximum allowable under state law is 10 percent.
Higgins estimated that the county loses out on $11.2 million in property tax revenue by keeping the homestead tax credit so low.
Mason suggested increasing the tax credit back to 5 percent, but no formal decision has been made by the County Commissioners.
With the decline in Ocean City’s market value, which will remain at the lower levels at least until the next reassessment in two years, and Ocean Pines due to be reassessed this year, the county will continue to lose property tax revenue.