SNOW HILL – The county will see about $14 million in additional revenue related to the latest property reassessments.
Phil Thompson, the county’s finance officer, provided the Worcester County Commissioners with an update regarding property tax revenues this week. While the state released the information in late December, Thompson said it was important to consider details beyond the 46% increase the county experienced.
“It’s important to point out the percentage increase noted in the headline and through the document is the total value increase, which will either be phased in equally over a three-year period or possibly limited for those taxpayers participating in the Homestead Credit program,” Thompson said.
In late December, the Maryland State Department of Assessments and Taxation (SDAT) announced the 2024 reassessment of nearly 800,000 “Group 3” properties. Statewide, the overall value for that group of properties was up 23.4% since the last reassessment three years ago. Here in Worcester County, there was a 46.1% increase in the value of properties reassessed, which were in Ocean City.
“Effectively almost exclusively Ocean City,” Thompson said.
In Worcester Couty, Group 3 residential values increased from $7,837,587,900 in 2021 to $11,576,277,100 in 2024, a 47.7% increase. Commercial values jumped from $926,276,300 in 2021 to $1,227,132,100, a 32.5% increase. Combined, the county’s residential and commercial Group 3 values increased from $8,763,864,200 to $12,803,409,200, or 46.1%.
Thompson said that while the 46.1% figure was a substantial increase, it was going to be phased in over three years. It could also be impacted by the number of property owners who have the Homestead Tax Credit.
“Based on the data and the limiting factors we anticipate the FY25 property tax revenue will increase by about 7.9%,” he said.
He pointed out that Worcester County has the third lowest Homestead Tax Credit Rate in the state at 3% as well as the third lowest property tax rate in the state.
“As for the reassessment process the SDAT uses numerous factors to determine the value of a property, including recent comparable real estate sales data and the estimated cost of construction,” Thompson said. “The robust real estate market we’ve experienced in recent years combined with escalating construction costs were major factors in the reassessment.”
He said that property tax revenue made up the majority of the county’s revenue.
“We’ll continue to monitor this and other revenue items,” he said.
Commissioner Chip Bertino asked if the increase had already been worked into budget projections.
Candace Savage, the county’s deputy chief administrative officer, said the figures had been included in early budget discussions.
“The total increase as Mr. Thompson said is $14 million,” she said. “When we apply that to the overall budget, we’re looking at a total budget increase of about 5.5% just based off of the property tax portion.”
She added that initial SDAT estimates had been provided to the county Nov. 30 so staff had been aware of the pending increase in property tax revenues.
“We are updated twice a year, Nov. 30 and March 31,” Thompson said. “Typically the November one sets the trend or the tone for the upcoming budget.”
He stressed that expenditures were a separate issue.
“We have some additional expenses we’re considering as well,” Savage said.
