Prince Frederick, MD – Not wanting to jeopardize the county’s across-the-board Triple A bond rating, a majority of Calvert’s commissioners voted against a proposed property tax rate decrease. The issue was discussed and voted on at the board’s Tuesday, May 2 meeting.
Commissioner Steve Weems [R – At large], who had proposed reducing the rate from the current $0.952 per $100 of taxable assessment to $0.928 per $100, thanked the other four commissioners for allowing the issue to be brought forward for discussion. Weems noted that his proposal does not affect the county’s income tax rate. Both the county’s property tax and income tax rates were upped last year on a 3-to-2 vote.
Weems and Commissioner Mike Hart [R – District 1] voted opposed to the increases. Weems acknowledged that the deceased revenue would reduce the county’s appropriation for other post employment benefits (OPEB) by $5.7 million. He added, however, county public school teachers would still get raises and the county’s road paving schedule would remain intact. Weems cited addition tax revenues coming from Dominion Cove Point in fiscal year 2018 as being further justification for the rate decrease. “What are we doing for the citizens of Calvert County?” Weems asked, adding that the residents who pay the lion’s share of the county budget with property taxes deserve a tax reduction.
The additional money from Dominion—a result of the local plant’s liquefaction project—is a $25 million payment in lieu of taxes (PILOT) allocation.
Commissioner Pat Nutter [R – District 2] noted the Triple A rating from three national bond rating agencies is significant. General obligation bonds, said Nutter, are similar to a “low interest credit card. If we lose that bond rating,” the interest rate will go up, he explained.
“One of the bond rating agencies’ concerns has always been the county’s willingness to enhance revenues and sustain those actions,” Department of Finance and Budget Director Tim Hayden stated in a memo to the commissioners. “As you know, the county’s excellent bond ratings save the taxpayers hundreds of thousands of dollars in interest expense over the life of the financed project.”
Calvert has several costly public projects in the pipeline, including a brand new Northern High School building. Next month the commissioners and other county government officials are scheduled to meet with bond rating agencies in New York.
Nutter stated that he doesn’t want the bond rating agencies to think “we are relying on extra money from Dominion. I think it’s a dangerous money situation at this point.”
“The bond rating’s everything,” said Hart, who stated the anticipated money from Dominion “makes you think you don’t have to be fiscally responsible. But that’s not forever.”
Commissioner Evan K. Slaughenhoupt Jr. [R – District 3] affirmed there were compelling reasons for tax increases in FY 2018. The necessity, said Slaughenhoupt, was due to the actions of state lawmakers who passed the responsibility of funding public school teachers’ pensions over to the counties and significantly cut jurisdictions’ Highway User Fee revenues. Expressing confidence the U.S. economy is showing signs of improvement, Slaughenhoupt stated that last year the majority of the commissioners set property and income tax rates “at the proper level.” He further declared the commissioners needed to “focus our attention on an actual plan” on how to budget the anticipated revenues from Dominion.
Acknowledging that no one likes to raises taxes, Commissioners’ President Tom Hejl [R – At large] said the board did the correct thing by adjusting the property tax rate last year for the first time in 30 years and for the first time in county history it helped achieve an across-the-board Triple A bond rating.
Weems sustained his vote favoring the tax decrease.
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