Berlin Maintains Current Tax Rate

Berlin Maintains Current Tax Rate
The Berlin Town Council discusses the town's tax rate Monday. Photo by Charlene Sharpe

BERLIN – The Berlin Town Council voted 4-1 to maintain the current tax rate.

The municipal tax rate will remain $0.815 per $100 of assessed value following a vote at Monday’s council meeting. The lone dissenter, Councilman Troy Purnell, argued that the town should increase taxes to address growing needs.

“There’s a lot of stuff that needs to get cut out to do 81.5 (cents)…,” he said. “I don’t think we need to be cutting out things we’re planning on doing. I don’t think we need to be cutting out an incremental tax increase that everybody swore we needed to do.”

After delaying adoption of the tax rate last month, elected officials resumed the discussion Monday. Councilman Jay Knerr quickly made a motion to maintain the current rate. Department directors, however, said they hadn’t seen the latest draft of the budget and weren’t sure what they’d be working with at the current tax rate. Planning Director Dave Engelhart urged the council to learn from the mistakes of the past. He said staff had been told to “share in the pain” when the town had approved a 12-cent tax increase in 2019.

“We did share in the pain, but we didn’t create the pain,” he said. “That was because previous mayors and councils for 12 years had not raised incrementally the real estate tax rate, which is a planning tool for any municipal body for their future spending.”

He said the public wouldn’t have had to face such a huge tax increase then if officials had considered smaller increases on a regular basis.

“Unless you make a concerted effort to consider a 1.5- or a 2.5- or a 3-cent tax (increase) each year, you’re never going to catch up,” he said. ‘That’s how we got in the boat we’re in, where there was public outrage about a 12-cent increase in one year.”

While staff weren’t given the latest budget draft, Engelhart said he doubted it included the pay increase staff had requested.

“Our understanding, without seeing numbers, if you pass this rate as it is, once again the employee group gets left out in the dark with nothing,” he said.

Mayor Zack Tyndall apologized for not sending staff the budget draft but said it did include funding for a 5% raise. Town staff asked for a 10% increase at the start of the budget process.

“That increase is designed to offset what we’re going to work toward which is a step system,” Tyndall said.

He said the budget included $130,000 that would be split among the 43 general fund employees.

“This is designed to get us through fiscal year 23,” Tyndall said.

He added that the employees’ base salary would be unchanged but that they would receive one-time payments of nearly $100 each pay period. With that change and some other tweaks, the shortfall in the proposed budget has dropped from more than $462,000 to $25,000.

“But you’ve stripped so many things out of the original proposal, which everybody says was a need,” Purnell said.

Purnell said staff and the town’s auditing firm had indicated the town needed an incremental tax increase.

“We’ve got so many paid people we’re not listening to,” he said. “They’re telling us we’ve got to do a little bit more. We’re not listening to the employees. I think we need to do more. I’d like to see a three-cent tax increase.”

When the vote was called for Knerr’s motion to maintain the existing tax rate, it failed with just two votes of support. Purnell subsequently made a motion to raise the tax rate three cents, arguing that increase would equate to less than $100 a year for most homes, but got no second.

Councilwoman Shaneka Nichols told her peers she’d voted against Knerr’s motion only because she didn’t like the way the pay increase was proposed as a one-time payment.

“I don’t want to see where it’s in a place this could not benefit in the long-term, when it comes to retirement and whatnot,” she said.

Tyndall said the way the pay increase was implemented didn’t need to be decided until the budget was formally introduced.

Finance Director Natalie Saleh agreed that the tax rate was the issue that was up for discussion. She said in balancing the proposed budget to allow for a consistent tax rate, officials had cut capital projects.

“It’s going to just strike us down the road going forward…,” she said. “I understand it’s hard. I’m not willing to say people have to cover it. But it’s a necessity to look for the future, at least three years down the road, and see what we need.”

She urged the council to consider incremental tax increases, as the millions the town received in American Rescue Plan Act (ARPA) funding wouldn’t be around forever.

“This budget is not balanced on the back of ARPA, ARPA, APRA,” Tyndall said. “The only thing that’s coming from ARPA is what we proposed as a stopgap measure to get us from FY 22 to FY 24 where we can implement a step system.”

He added that the budget had not yet been introduced and could still be modified.

Knerr said he was reluctant to burden residents with a higher tax bill.

“I find it very hard to add additional money on their tax bill when they’re already paying more because of assessments,” he said.

A second motion to adopt a tax rate of $0.815 passed with a 4-1 vote.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.