The St. Mary’s County Commissioners on Monday received revenue projections and information on several proposed tax reductions and credits as they prepare to work on the Fiscal Year 2015 (FY ’15) budget. The presentation was given by Chief Financial Officer (CFO) Elaine Kramer and Deputy CFO Jeanett Cudmore.
The officials presented a picture of continuing relatively flat property tax revenues along with steady income tax revenue increases. For FY ’15, income tax revenues are predicted to increase by slightly more $3 million with property tax revenues up a modest $800,000. That will lead to a combined revenue increase of $4 million.
On the expense side it is estimated that the county will have to contribute $1 million more to the Board of Education’s budget to meet the state-mandated Maintenance of Effort. That factors in a projected K-12 student enrollment increase of 2.27 percent and includes the state-mandated contributions to teacher pensions and a voluntary contribution to the school system’s OPEB (Other Post-Employment Benefits).
The commissioners also received reports on three proposals from various county commissioners: elimination of the energy tax, changing the homestead tax credit from five percent to 2.5 percent, and changing the age for senior tax credits from 70 to 65.
Eliminating the energy tax would reduce revenue by $1.3 million. Reducing the homestead tax credit would put a $450,000 hit on revenue.
It was the proposal from Commissioner Daniel Morris (R: 2nd) to reduce the age for senior property tax credits that raised the most controversy.
Kramer explained the disparate ways that counties around the state supplement the state senior property tax credits. Six counties, including St. Mary’s, have the age in which the credit begins at 70, while four have 65 and one has age 60. Six counties including St. Mary’s also have additional property tax credits. But St. Mary’s is the only one that uses Net Taxable Income and sets the cap at a higher $80,000. The others use Household Income and set the cap at $60,000.
Commissioner Lawrence Jarboe (R: 4th) said the higher cap was intended to be an incentive for higher income retires from the base to settle in St. Mary’s County. Morris agreed with Jarboe on the desire to attract higher income retires. He said he wanted to see seniors with money to spend stay in the county
But Commissioner Cynthia Jones (R: 1st) said to the other commissioners, “Your analysis is based on assumptions I haven’t seen.” She noted that St. Mary’s does more than most counties for senior citizens.
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