Talbot Voters Will Decide on Proposed Changes to Tax Cap

This video is about 17 minutes long.

Talbot voters will decide on two substantive changes to the county’s property tax revenue cap and a third measure that would correct faulty language in the current tax cap, which was approved by voters in 1996.

Talbot County Sheriff Joe Gamble and Emergency Services Director Clay Stamp have been leading the charge in seeking voter approval for the ballot questions.

The public safety officials say the existing cap has limited the county’s ability to attract and retain deputies, paramedics, and other first responders.

Salaries and benefits for first responders are lower than in surrounding counties, the two have said, making it difficult to find new hires for open positions and leading to trained staffers leaving for better compensation packages elsewhere.

The county also needs to build a new office for the sheriff’s office and the county health department, as well as provide an additional substation for paramedics, officials have noted.

Question B on the ballot for Talbot County voters is a charter amendment that would clarify how the county computes the property tax rate.

The current language, in Section 614 of the Talbot County Charter, identifies the properties included in the calculation as those “existing on the County real property tax rolls at the commencement of the County fiscal year.”

But that wording does not accurately reflect how the information is determined.

The county finance department actually uses the constant yield tax rate certification supplied by the state to determine the tax rate needed to comply with the tax cap.

Question B would amend the language to change it to those properties “included in the Constant Yield Tax Rate Certification prepared by the Maryland State Department of Assessments and Taxation.”

According to the League of Women Voters (LWV) analysis in the voters’ guide at vote411.org:

“A vote FOR the Charter amendment means the Talbot County Charter would be amended to clarify that the County would use the Constant Yield Tax Rate Certification supplied by the State when determining the property tax rate to be used in the new fiscal year.

“A vote AGAINST the Charter amendment means that the inaccurate wording would remain in the Charter.”

This video is about 20 minutes long.

Question C would amend the tax cap by eliminating a reference to the Consumer Price Index-Urban (CPI-U). The existing property tax revenue cap limits the annual increase in property tax revenues to 2% or CPI-U, whichever is less.

Question C would eliminate CPI-U, which in some years has been less than 2%, further restricting the county’s ability to increase revenues to fund needed services and capital projects.

Since the current tax cap took effect in 1997, the increase in property tax revenues has been limited below 2% during nine fiscal years (with an average increase of 1%) and has been limited to 2% during 15 fiscal years (when CPI-U increased an average 2.78%), according to the LWV voters guide.

“This means that nine times the revenue cap has kept pace with the yearly national rate of inflation, but it has also been less than the national rate of inflation 15 times,” according to the League of Women Voters. “This resulting constriction of tax revenue leaves the County with insufficient revenue to fund all of the budget requests from County departments. While County services have continued to be funded, funding has not addressed all of the needs of the County and has left County departments with unfunded needs. Eliminating the CPI-U alternative would help County services over the long term keep pace with fixed costs and growing needs.

“County salaries and benefits, especially for public safety and emergency services employees, are not competitive with surrounding counties causing Talbot County the loss of valuable, trained personnel to those jurisdictions. For example, Talbot County loses several deputies every year, and it costs the County $97,482 for the first year of a newly trained deputy.”

“A vote FOR the Charter amendment means the Talbot County Charter would be amended to eliminate the use of the CPI-U as an alternate to the 2% cap on tax revenue, leaving the cap on tax revenue at 2% going forward.

“A vote AGAINST the Charter amendment means that the CPI-U would continue as an alternate to the 2% cap on tax revenue.”

Question D would allow the county council to temporarily increase the property tax rate above the revenue cap by up to one cent per $100 of assessed value for five years only.

A one cent increase in the property tax rate would cost the owner of a home assessed at $250,000 an additional $25 annually; an additional $50 annually for the owner of a home assessed at $500,000.

Officials have pitched the one cent increase as a way for the county to catch up on lost revenue from the years when CPI-U limited the increase in revenue below 2% and as a way to help fund much-needed capital projects.

“Talbot County’s revenue cap is one of the most restrictive in the State of Maryland, making it extremely difficult for the County to raise sufficient revenue to fund certain initiatives, including key public safety projects, such as a new facility for the Talbot County Sheriff; additional equipment and personnel for the Talbot County Department of Emergency Services; and, a new facility to house the Talbot County Health Department,” according to the League of Women Voters.

In its voter guide, the LWV notes:

“The County Council is, therefore, asking the voters to give the Council authority to increase revenues above the revenue cap, but only temporarily and with a limit of up to one cent (1¢) per one hundred dollars of assessed value. The Charter Amendment would authorize the County Council to raise revenues above the revenue cap by up to one cent (1¢) per one hundred dollars of assessed value for five years only.

“Arguments in Favor: County tax revenues have not kept pace with the rise in County costs to fund the full functioning of all County departmental needs, nor to remain competitive with other counties in our region in attracting and retaining employees,” according to the League of Women Voters. “This means there are fewer dollars available to fund capital projects that this ballot question is meant to address.

“The ability to increase revenues temporarily above the revenue cap would allow the County Council to fund costs anticipated for near-future capital expenses, including the new Sheriff and Health Department buildings and equipment for emergency services. Any temporary rise in tax revenue above the cap would go toward these projects. Increasing revenue now would reduce the cost of borrowing money to fund these needs.

“Arguments Against: This measure is almost sure to be used by the County Council over the next five fiscal years resulting in property taxes that are higher than 2% over the previous year.

“A vote FOR the Charter amendment means the Talbot County Charter would be amended to allow the Council the option of generating revenues above the revenue cap by up to one cent (1¢) per $100 of assessed valuation for the next five fiscal years.

“A vote AGAINST the Charter amendment means that the Charter would not be amended to allow an exception to the cap on tax revenue beyond the limit specified in the Charter.

The Talbot County Democratic Central Committee supports passage of all three tax cap measures, noting on its website:

“Question B will have no impact on property tax rate. This is a technical fix to reflect the way the assessable tax base is determined in the original charter.

“Question C is a permanent change to the way revenue is calculated. We currently use the Urban CPI or 2% whichever is lower. The Urban CPI does not accurately reflect the needs of a rural county.

“Question D is urgent for 2021 Fiscal Year for the County. Based on our population growth, we need more ambulance crews. Currently we cannot guarantee the twenty-minute minimum response time for an ambulance will be met, especially in the north part of the County without a fourth ambulance. This provision would also allow for more competitive pay for first responders.

“This amendment would allow a temporary increase of one penny per hundred dollars of assessed property value. It will provide the funds we need to meet the public safety needs of our citizens. The cost would amount to an annual increase of $25 for a property valued at $250,000 or $50 for a property valued at $500,000.

“The increase ends in five years.”