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May 12, 2025

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2 News Homepage

St. Michaels Budget Set for Wednesday Night Public Hearing

May 11, 2021 by John Griep

St. Michaels will hold a virtual public hearing Wednesday night on a proposed $3.5 million budget that includes a cut to the property tax rate and a smaller reduction in marketing spending than originally suggested.

The Fiscal Year 2022 budget, proposed by St. Michaels Commissioner Tad DuPont and introduced by Commissioners David Breimhurst and Mike Bibb, would set the property tax rate at 49 cents ($0.49) per $100 of assessed value. The town’s current rate is 52.4 cents ($0.524) per $100.

DuPont, selected by the town commissioners as treasurer, said during a May 4 budget work session that the commissioners are elected by town residents and “it’s their interest that we need to look after.

“They’re the ones that pay significant portion of the bills, and it’s our duty to ensure public continuity and safety and look after their interest, as well as everybody else’s,” he said.

He said the budget was a compromise, with departments being adequately funded, but not getting everything they wanted.

“We listened to public works. They got most of what they asked for but they didn’t get it all. We listened to the police department. They got a lot of what they wanted, they got what they needed, but they also didn’t get everything that they’d like to have. The same thing happened with the administration office. They got some of what they wanted, but they didn’t get it all,” DuPont said.

“The other thing that we’ve been able to accomplish in this budget is we’ve been able to separate the water department…. The water department will stand on its own and it will be able to pay off its debts in roughly three years. The way it currently is budgeted, it will be approximately $71,000 to the plus … this year.

“So that all being said, I feel that the commissioners have done a great job in trying to balance everybody’s needs, everybody’s wants, including the taxpayer,” DuPont said.

Using the current rate and a projected tax base of $307.6 million, the town would have collected $1,611,824 in property taxes. The proposed 49-cent rate will bring in $1,507,240, reducing the town’s revenues by about $100,000.

With the lower rate, property owners would save $34 on a $100,000 property, $68 on a $200,000 property, $170 on $500,000, $340 on $1 million, $1,700 on $5 million, and $3,400 on a property valued at $10 million.

The minimal savings to individual taxpayers while the town commissioners are debating $50,000 in spending prompted Commissioner Jaime Windon to oppose the tax cut during a May 4 budget work session.

“A few weeks ago we had a kind of a general philosophical discussion about some people are of the mindset that we should always be working to reduce taxes and so that’s an admirable goal if that’s what your end result is.

“The problem for me and the reason that I’m so resistant to it after you know trying to look at it from all angles — and I promise you I have — is that it’s just that cut just doesn’t amount to that much for the individual taxpayer, even those who own a massive amount of property,” she said.

“And I just feel that we’re still debating hotly $5,000, $10,000, $20,000 decisions — which I’m not saying we shouldn’t debate every fiscal decision that comes before the town — but until we’re in a place where we have more than enough money to make all of those decisions that make this town a town that we’re all proud to live in, and that we all feel is thriving, then I don’t … personally feel motivated to make a tax cut, which is why I’m opposed to it,” Windon said.

Commissioner David Breimhurst said the budget included “safety valves” and “we’re still in the midst of a pandemic,” with restaurants required to maintain six-foot distancing.

“So, if worse comes to worse and things do look like they’re going down the drain, we still have the reserve and the ability to kick in,” he said. “(W)e’ve done a lot of hard work on this budget and it’s been painful … because we’ve really … sliced and diced it every which way we possibly can. And we’re trying to give something to everyone and if it’s three cents for the taxpayers, that’s great.”

The most controversial issue in the budget had been a proposal to cut the marketing spending from the $140,000 originally proposed to $40,000.

The money for marketing and advertising comes from two revenue sources — the accommodations tax and the amusement and admissions tax. The biggest portion comes from the accommodations tax, which is paid by guests staying at hotels, B&Bs, inns, and short-term rentals.

St. Michaels typically has used about 75% of the revenue from those two taxes to pay for town services related to tourism, including trash pickup and police. The town has used the remaining 25% for advertising and marketing and the $140,000 in the initial draft budget was about 23% of the expected accommodations and amusement taxes for FY22.

During the May 4 budget work session, numerous business owners spoke against any cuts to the marketing budget.

Kim Hannon, president of the St. Michaels Business Association, noted “the money that is used for advertising is from the accommodations and amusement tax…. (T)he accommodations tax and amusement tax is paying for this. So … if you cut that, you’re basically biting off the hand that feeds you. It just doesn’t make any sense to do that.”

Restaurateur Chris Agharabi said St. Michaels residents and businesses depend on tourism and the town should be spending more on marketing, not less.

With a budget of $3.5 million, the town is spending about 2.5% on marketing, much lower than the recommended 7 to 8%, he said.

“So, yeah, we’re all gonna save a couple hundred bucks on property tax, whoop-de-do. A couple hundred dollars. Terrific. Why don’t you take that money (and) put some flowers in front of my building that I paid for?” Agharabi said. “So get a grip, get control of your $3.5 million budget, think a little bit, stop worrying about two cents on $100 and do something productive ….”

The budget as introduced during that meeting provides nearly $91,000 for marketing, about 15 percent of the $610,000 revenue expected from the accommodations and amusement taxes.

The proposed budget includes another $64,000 reserved for marketing and/or trash services. If half of that reserve is approved for marketing during the fiscal year, the total spending for marketing would be $123,000, about 20 percent of the expected revenue from the two taxes.

The virtual meeting using Zoom begins at 6 p.m. Wednesday, May 12. If you have not used Zoom, please take a few minutes to download the free app to your computer or smart phone prior to joining the meeting.

Join meeting by computer or smart phone by clicking link below:
https://us02web.zoom.us/j/3264261778
Meeting ID: 326 426 1778

Join by phone with audio only:
1-301-715 8592
Meeting ID: 326 426 1778

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Filed Under: 2 News Homepage Tagged With: accommodations tax, budget, cut, marketing, property tax, public hearing, rate, St. Michaels

St. Michaels May 4 Budget Talks to Focus on Marketing, Trash

May 4, 2021 by John Griep

This video is about 33 minutes long.

St. Michaels commissioners will hold a budget work session this afternoon, as the town grapples with two major issues — marketing and trash.

A suggestion to drastically cut the amount of money the town spends on marketing has drawn heated opposition from business owners and tourist attractions.

The debate also has led to two commissioners publicly apologizing to two local business owners for suggesting they had supported the cuts to the town’s marketing budget.

The money for marketing and advertising comes from two revenue sources — the accommodations tax and the amusement and admissions tax.

The accommodations tax is paid by guests staying at hotels, B&Bs, inns, and short-term rentals. The money is collected by the lodging industry and then paid to the county.

Talbot County keeps up to 5% for administrative expenses, then sends the tax revenue to the towns in which the tax was collected.

Any accommodations tax paid for lodging that is outside the incorporated towns is kept by the county, which has dedicated its use for economic development and tourism. However, the county law allows towns to use accommodations tax revenue to “alleviate costs related to tourism.”

The amusement and admissions tax is “imposed on the gross receipts from admissions, the use or rental of recreational or sports equipment and the sale of merchandise, refreshments or services at a nightclub or similar place where entertainment is provided,” according to the state comptroller’s office.

St. Michaels typically has used about 75% of the revenue from those two taxes to pay for town services related to tourism, including trash pickup and police. The town has used the remaining 25% for advertising and marketing.

During an April 16 budget session, Commissioner Tad DuPont, the town’s treasurer, suggested the proposed marketing budget for Fiscal Year 2022 be cut from $140,000 to $40,000.

Several business owners spoke against any cut during the town’s April 27 meeting, noting advertising is responsible for making the town and its attractions so well known.

In addition to the marketing budget, commissioners also are awaiting information on whether it would be more cost effective to out-source trash collection to a private firm.

During the April 27 meeting, Donna Hunt, a former town commissioner, said that issue had been extensively studied in the past and the town determined costs would be lower and services would be better if town crews collected trash.

Hunt noted that a private firm likely would pick up trash later in the day, meaning trash containers would remain on the streets and sidewalks all day until residents returned home from work and were able to put the containers away.

Today’s virtual budget work session is set to begin at 5 p.m. For information on how to view and/or listen to the meeting by computer or phone, click here.

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Filed Under: 2 News Homepage Tagged With: accommodations tax, advertising, budget, commissioners, marketing, St. Michaels, tourism

St. Michaels Hard Talk: A Town Debates the Tourism Tax Revenue

April 21, 2021 by John Griep

This video is about 30 minutes long.

A proposed 70% cut to the town’s advertising budget during a recent budget work session has St. Michaels business owners concerned.

During the April 16 virtual session, St. Michaels Commissioner T. Coleman “Tad” DuPont suggested reducing advertising spending from $140,000 to $40,000 in the proposed Fiscal Year 2022 budget.

DuPont, the commission’s treasurer, said the town should not be encouraging more visitors when businesses are unable, due to the COVID-19 pandemic, to accommodate current visitors.

He later suggested the savings could be used to fund other costs associated with tourism, such as an additional police officer and Saturday trash pickup.

The funds for advertising do not come from town taxpayers, but from the accommodations tax paid by guests staying at hotels and other lodging.

Talbot County collects the tax, then disburses it to the towns where the money was collected (after deducting up to 5% for administrative costs).

County law requires towns to use accommodations tax revenue “to alleviate costs associated with tourism.”

St. Michaels currently allocates 25% of its accommodations tax revenue “directly to advertising,” 5% to the volunteer fire department, and the remaining 70% throughout its budget “to help support the cost of tourism to the town, ie. Personnel, restroom maintenance, weekend trash pickup, a small portion of dump fees, park maintenance, a portion of Liability Insurance, infrastructure repairs and maintenance, a portion of capital improvements, etc.,” Town Manager Jean Weisman said in response to an information request.

If the town commissioners were to adopt DuPont’s proposal, St. Michaels would only be committing about 8 percent of its accommodations tax revenue directly to advertising to promote tourism to the town.

DuPont’s proposal led to a lengthy and occasionally heated discussion among town commissioners, with Vice President Jaime M. Windon questioning such a drastic cut.

Windon said town business owners would be “aghast” to hear the proposal.

In an April 19 email, Kim Hannon, St. Michaels Business Association president, informed members about the proposed cut.

“Hi, I am writing to let all of you know that the Commissioners of St. Michaels have been discussing slashing the annual advertising budget from $140,000 to $40,000! YES, slashing it $100,000 – 70% CUT,” Hannon wrote.

Town commissioners did not reach a consensus on the cut during the April 16 budget work session and are waiting to learn how much it would cost to outsource trash pickup before setting the next work session.

A public hearing on the budget will be held after it is officially introduced.

The town’s current draft budget, which includes other changes town commissioners accepted by consensus during the April 16 work session, is below.

St. Michaels FY22 Budget 4-16 DRAFT

The Spy Newspapers may periodically employ the assistance of artificial intelligence (AI) to enhance the clarity and accuracy of our content.

Filed Under: 1 Homepage Slider, 2 News Homepage, News Portal Lead Tagged With: accommodations tax, advertising, budget, business, Economy, St. Michaels, tourism

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