(May 8, 2015) The proposed increase in the tax rate from its current 77 cents, however, is just the preliminary number that shows what the rate would have to be to cover all the $189.8 million in budget requests that have survived so far. It also assumes not drawing down again on what is known as the budget stabilization fund, a set aside account to be used when money cannot be obtained from other sources.
Of the approximately 300 people in attendance, more than 50 percent were associated with the public school system, many of them wearing color-coded T-shirts showing school affiliation. In addition, attendees wore stickers supporting the schools and a few waved signs.
Dozens availed themselves of the option to address the commissioners, but only a few addressed anything other than teacher salaries.
For their part, the commissioners, save an absent Diana Purnell who was called out of town on a family matter, talked mostly among themselves during the three-and-a-half hour hearing.
The comments not directed at the school budget were largely against any sort of tax increase or to express consternation at the provided summary, critiquing it as too general with too large expense amounts grouped into a category labeled “other charges.”
The meeting began with County Administrator Harold Higgins summarizing the county’s current financial situation. He described how the county’s assessable base has shrunk by 26 percent and the tax increase in fiscal 2013, “the first in a decade,” was a stopgap measure not to increase revenue but to stabilize losses.
Higgins also noted the creation in 2009 of the budget stabilization fund when revenues were still high to help soften the yet-to-be-felt effects of the 2008 real estate crash.
The county is on a three-year reassessment schedule that divides the county into three parts, with Ocean City responsible for more than half of the county’s assessable base.
Ocean City was reassessed for 2016 and values had remained largely flat while county officials had expected an increase.
The county allocated some budget stabilization funds to balance this year’s budget. As stabilization funds are the last to be spent to keep the lights on in Worcester County, no number for how much was actually spent from that fund will be available until next fiscal year, or after July 1.
County Treasurer Phil Thompson puts the amount of remaining funds available for use in the fiscal 2016 budget between $9 million-10 million. The county is facing a $22 million shortfall between the $189.8 million that has been requested and the revenue it expects to collect at the current tax rate.
Even though the proposed budget total for fiscal 2016 will be trimmed to where its somewhat closer to the current year’s spending of approximately $178 million, the stagnant flow of tax revenue is expected to continue to hamper the county’s finances until Ocean City is reassessed for 2019.
Stabilization funds, bond premiums and casino revenue are all sources of county income, but cannot be included in the estimated tax rate increase advertisements.
The state law that governs county budget advertising aims to give the public a clearer understanding of local government’s finances, or at least the part to which taxpayers directly contribute, according to Budget Officer Kathy Whited.
Higgins said that the proposed tax rate of 93.25 cents would still put Worcester County among the least-taxed counties on the Eastern Shore, bumping it above Queen Anne’s County’s 84.7 cents and Somerset’s 91.5 cents in 2015. Wicomico County’s rate is 95.2 cents for 2015, according to Higgins.
The greatest single factor in Worcester’s budget is the public school system, which is asking for $82.6 million from the county. In stating his case for that amount, Superintendent Dr. Jerry Wilson said, “Our salary scales are not designed to fluctuate with the economy.”
After outlining the efficiencies and spending reductions he and the Board of Education have instituted, he told the commissioners it was time for the county to do its part for the teachers.
Teachers are contracted to get annual raises based upon years of service. In 2009, 2011 and 2012 these steps were skipped, effectively negating three years’ worth of experience within Worcester County. Teachers in Worcester, if they wanted to, could move to other counties to teach and get full credit for the missed steps, he said. A few teachers at the meeting reported losses in the tens of thousands of dollars due to the missed steps.
“No one wants an increase to taxes but everyone expects exceptional schools,” Wilson said.
Of the proposed tax increase, according to Wilson, the schools’ portion would $4 million, which he said amounts to 2.8 cents per $100 of the proposed increase. On a house worth $200,000 in the county, that would come to $56 for the year.
Whatever the tax rate ends up being, however, won’t be known until the end of the month, following two county commissioner budget work sessions on May 12 and May 20. These sessions are open to the public, but do not allow for comment. The budget will be adopted during the June 2 regular meeting.