Property Assessments … YOUR taxes … and the City Budget

If you are a property owner in the City you have received the new assessment for your house or condominium. According to the State Board of Assessments, the “average” property in Annapolis declined 17%, with single-family houses declining 15% and condos decreasing a more significant 24%. For many property owners, the reaction may be: “my assessment went down, and that means my property taxes should go down, too”. If that’s what you thought … think again.

The current City budget for FY 2012 is $95 million; 39% of the City’s revenue comes from the property taxes we pay. The recent (lower) assessment means the City’s property tax collections will decrease from $37 million to $33.3 million … a drop of $3.7 million. If the City wants to “keep” the same level of taxes (we hear they do), the tax rate would have to increase by 11%. For the record, last year the Mayor and Council increased the property tax rate from 53 cents per $100 of assessed value, to 56 cents. As a result, your property taxes increased about 6%. Now, just to keep City tax revenues constant, the rate would increase – again – from 56 cents to 62.2 cents per $100 of assessed value. This is an increase of 11% in your Tax Rate.

What does all this mean to the average home-owner and tax-payer? First, it means the City is highly-dependent on property taxes to fund operations. Second, it means the City continues to run the City as if the economy hasn’t affected home values and tax-payers. In fact, it has refused to cut the cost of running the City for so long that our City of 38,500 people has had to borrow tens of millions of dollars (more than $20 million last year, alone) just to meet its obligations; has a Police and Fire Pension Fund that is “unfunded” by $20 + million; and an additional $44 million “unfunded” liability for “Other Pension Benefits”. If that’s not bad enough, the City also has an estimated $120 million liability for “essential infrastructure”, like our water treatment plant, sewer lines and water pipes, roadways and sidewalks — the critical things we all rely on for day-to-day life. Add all of these together to the City-issued bonds for capital projects, and the debt and liability total for the City is a staggering $200 + million …more than twice the City’s annual budget$300 million … and growing. That’s almost $5,200 for every man, woman and child in the City!

Most prudent families know that, if you are already in debt, you need to pay down debt … not borrow more. If your income has declined, you need to reduce expenses …not spend more. Unfortunately, the City isn’t managed in a financially-prudent way. But we are trying to change that … and we need your help.

Beginning February 29 at 7pm, Annapolitans for a Better Community is hosting a series of “combined community meetings” at Maryland Hall. We have already begun to plan and organize for these meetings and have the support and interest of more than 10 community groups throughout Annapolis. These meetings will help you to understand how the City has gotten into this financial mess …what the Mayor is proposing for next year’s budget … and what we, as tax-payers and residents, can do to change it.

The City has started to plan the next budget. The Mayor has already indicated he is confident he can push through a property tax rate increase. Once the rate is increased, we can expect to pay more property tax every year. We need your help to join with your neighbors to identify specific spending cuts. Essential city services can be maintained, but at a much lower cost. The first step is to understand where the money is going, and then require our elected officials to eliminate wasteful, unnecessary spending. If we don’t take action now, we will get more of the same with costs simply passed on to taxpayers.

Annapolis is at a critical point and we are faced with significant and important fiscal and financial decisions. How we respond can affect our community for generations to come. We all want the City to be the best it can be. Please help us achieve that goal.

Comments are closed.