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County eyeing 8-cent tax hike to close ‘16 budget gap

(May 15, 2015) Although nothing has been finalized, some clues began to emerge Tuesday as to how the Worcester County Commissioners intend to close the $22 million gap between revenues and expenditures.

As the commissioners began to evaluate the proposed FY16 budget line by line during their first work session devoted exclusively to that the issue, a clearer picture of their intent began to form.

Chiefly, it appears the county is working with a proposed 8-cent increase in the property tax rate, which will take it from the current rate of 77 cents per $100 of assessed value to 85 cents per $100. On a home assessed at $200,000 the tax hike will mean an extra $160 in taxes, bringing the total to $1,700 from $1,540.

Even with the increase, Worcester is still well behind Somerset and Wicomico’s 2015 respective rates of 91.5 cents and 95.2 cents per $100. The increase will edge Worcester ahead of Queen Anne’s county rates for 2015 of 84.7 cents, which translates to $6 on a $200,000 home.

The budget committee, consisting of County Administrator Harold Higgins, Treasurer Phil Thompson and Budget Officer Kathy Whited, presented a budget whittled from the original estimated $189.9 million request to $182.5 million, cutting $7.3 million.

It was this proposal the commissioners reviewed during Tuesday’s work session. The commissioners both added and subtracted amounts on this version, ending with nearly $350,000 in additional cuts.

Additional revenue sources were included in this version, which had not been in the previously advertised 15-cent hike proposal. Since those revenues can be fluid amounts based on a number of factors, State law requires counties to advertise any increase above the constant yield rate, this year determined to be 77.55 cents.

Bond issues, railroad taxes, casino funds and stabilization funds, while avenues of revenue, could not be legally be counted towards closing the gap.

The committee’s version of the budget included using about $160,000 of the remaining stabilization funds, estimated to be between $9 million to 10 million after about $6 million was used to balance the budget this year. Budget stabilization funds are the last to be spent as the county closes out a fiscal year, so the true amount spent won’t be known until after July 1.

The commissioners voted to remove the $160,000 immediately, citing an earlier agreement among the board to not touch any stabilization funds this year.

The elephant in the room, the Board of Education, was not discussed at this hearing. That was instead postponed until the next scheduled budget work session on May 20.

The commissioners are expected to adopt the budget during their June 2 meeting.

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