City officials hold line on property tax rate

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Note:  As of the printing of this article in the Cumberland Times-News on May 11, 2011, and the posting of this article on May 17, 2011, no vote by the Cumberland Mayor and City Council has taken place with respect to the tax rate.  Only a public hearing has been held thus far.


State assessments could mean higher bill

May 11, 2011, Matthew Bieniek, Cumberland Times-News

CUMBERLAND — Few citizens turned out for a public hearing on the city’s plan to set the tax rate Tuesday night at City Hall during the regularly scheduled council meeting. During the meeting, city officials took care to explain their reasons for sticking with the current tax rate and not reducing the rate to the lower constant yield rate.

Holding to the current 0.9654 rate per $100 of assessed value could mean an annual tax of $724.05 on a home assessed at $75,000. The exact amount will vary based on final state assessments of individual properties; for instance, if an assessment on the same home rises by 4.3 percent, the tax, at the current rate, would be $755.18. A reduction to the constant yield rate would save that homeowner about $30 per year. The exact tax depends on the individual assessment.

The constant yield rate would result in the taxing authority receiving the same revenue in the coming taxable year that was produced in the prior taxable year, according to the Maryland Department of Assessments and Taxation.

Keeping the current tax rate, in light of increased assessments, will gross the city an additional $360,436 next fiscal year, according to a table prepared by city officials. The total revenue from real property taxes is estimated to be $8,865,039, city officials have said. The city will only net about $183,126 of the increase though, because personal property tax assessments are expected to fall due to the economy, based on projections, said Jeff Rhodes, the city’s director of administrative services. Most of the personal property taxes involve property owned by businesses and corporations, so businesses closing and devaluation of properties are among the reasons for the projected decline in revenues, Rhodes said.

Cumberland resident Nancy Brant didn’t so much make a statement in the public hearing as enter into a back-and-forth with council members Butch Hendershot and David Kauffman.

Whenever Brant sees the required legal ad in the Times-News about the city setting a tax rate, she said, “I tell my husband to reach for his billfold.” If assessments go up, tax rates should go down to the constant yield, she said.

“If the tax rate doesn’t go up, it’s the assessment that causes the increase,” said Hendershot.

Kauffman said the five council members face a challenge. “None of us wants to increase the cost of living in the city,” he said. The trouble is that going back to the constant yield would be unrealistic, looking at the cost of city services, Kauffman said.

“We have to make choices,” Brant said. “We don’t have a revenue problem. We have a spending problem,” she said. City resident Jim Combs told council members the debate over whether taxes are going up or assessments are going up is “a game of semantics.”

The long-term revenue projections for the city don’t look good, with the state department of assessments projecting a 5 to 6 percent drop in assessed values over the next few years, and that means the city would get less money even holding to the same tax rate. Mayor Brian Grim said such a reduction could cut city revenues by half a million dollars.

Contact Matthew Bieniek at This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .