BERLIN — Town leaders kicked off the budget process with discussion of revenue projections and potential tax increases this week.
On Monday, the Berlin Town Council reviewed revenue forecasts for the coming year and looked at the impact various tax increases would have for the town. Finance Director Natalie Saleh presented data for tax increases ranging from 3.75% to 8.75%.
“This is just projections,” Saleh said. “Projections only.”
Last year, the town raised its tax rate from $.68 to $.80, an 18% increase. According to Saleh, at the current rate the town expects to receive property tax revenue of about $3.5 million in the coming fiscal year. She said that if the rate was increased to $.83, a 3.75% jump, an additional $130,879 would be generated. If the rate was hiked to $.85, the town would get an additional $218,132 in revenue. She said a tax rate of $.87, a 8.75% increase, would bring the town an additional $305,384 in revenue.
She added that the current tax bill for a $200,000 home was $1,600. If the rate increased 8.75%, that home’s tax bill would be $1,740.
Saleh went on to present $504,200 in proposed capital expenses for the coming year. While grants would cover $330,200 of the proposed capital budget, the town’s general fund would still need to contribute $174,000.
One of the largest capital projects for the coming year outlined by Saleh was street repairs. With an expected $222,700 in highway user revenues, the town is set to repair Harrison Avenue, Esham Avenue, Graham Avenue and the north section of Flower Street. The town has also proposed using $50,000 to purchase a CrackPro heated hose machine, which would allow crews to seal cracks in the streets.
“If you seal cracks it prolongs the life of a road,” Town Administrator Jeff Fleetwood said.
Other capital projects proposed include the purchase of a new Chevy Tahoe and fingerprint system for the police department, the replacement of doors and windows at town hall and the purchase of an F150 for the public works department. Also on the capital list is the installation of basketball lights at Henry Park, although the town would only need to fund $1,000 of the cost, thanks to a Community Parks and Playgrounds grant.
Councilman Dean Burrell expressed frustration over the fact that that project received priority over the installation of permanent restrooms at Stephen Decatur Park.
“I really do think as soon as possible we need to expedite having somewhere permanent for children to use the bathroom in that park,” he said.
Saleh’s presentation Monday also included figures associated with salary increases for town staff. Currently, the town’s annual employee wages amount to $2,972,041. A 2% increase would cost roughly $60,000 while a 3% increase would cost $90,000.
Fleetwood said he was recommending a 9% salary increase for the town’s sworn police officers after reviewing salaries at other local law enforcement agencies. That would cost the town $60,909.
“We’re behind…,” Fleetwood said. “My numbers show we’re next to last.”
Mayor Gee Williams is expected to introduce a proposed tax rate March 9. A public hearing on the tax rate is set for March 23.
“Obviously I’m going to be making some personal judgments between now and March 9,” he said, adding that he wanted citizens to understand the issues behind the proposed rate, such as salaries and capital expenses.
Resident Jason Walter pointed out that Berlin was one of a very few municipalities in Maryland that raised taxes last year.
“This past year the tax season was pretty inactive,” he said. “There were eight municipal increases, eight municipal decreases. They all were averaging around 3.5 cents up or down. You increased our taxes 12 cents, about 320% of what the average increase was of the eight that increased of the 157 Maryland municipalities.”
He added he thought Berlin’s rate was about twice the state average for property taxes.
“It’s all relative,” Williams replied. “The tax rates generally in this area are higher than they are in metropolitan areas.”
Williams added that the projections presented Monday were just meant to show “what it would take” if the council wanted to do the projects presented.
“I understand your concern about the tax rate but also know that if I have anything to apologize for it’s for not bringing it up or insisting on a tax increase for 12 years,” Williams said. “That was a big mistake.”