Leonardtown, MD – The Commissioners of St. Mary’s County will hold a public hearing Tuesday, Nov. 1 on the county Homestead Tax Credit. Currently owner-occupied residences have their annual property assessment increases capped at five percent. Commissioner Mike Hewitt (R- 2nd District) at their Tuesday, Oct. 18 meeting said he wants to reduce the cap to three percent. At this point he doesn’t seem to have majority support for the proposal.
Homeowners have to apply for the credit every year. With assessments in recent years on tribe decline, the amount of taxes foregone by the county under the program has also been on the decline, indicating the actual increases were often at or near the cap. Hewitt wants more people to be able to take advantage of the program.
The commissioner notes that the country has been blessed with an increase in commercial activity, such as the shopping center under construction where the new Harris Teeter in Califoria will be located and the shopping center scheduled for Charlotte Hall. He said the commercial increases can offset any revenue lost from lowering the cap.
Hewitt offered a personal example of what he was talking about. He said he recently sold the businesses started by his father in 1964. He said a Baltimore businessman who owns a chain of mattress stores paid him cash for the business. He said that successful entrepreneur told him, “This area is growing.” He wants to be a part of it, Hewitt added.However, the other commissioners weren’t so sure. Both Todd Morgan [R-4th District] and Tom Jarboe [R-1st District] are in the defense industry. Both said the activity level at the Patuxent River Naval Air Station (Pax River) was flat.
Morgan pointed out the capital projects approved by the commissioners, including the jail expansion and the new library and senior center. “We have spent a lot of money over the last couple of years and those projects will have to be paid for,” he said.
According to Chief Financial Officer Jeannette Cudmore, St. Mary’s has the lowest cap of the three Southern Maryland counties, Charles is at seven and Calvert is at 10 percent. Most of the counties in the state (12) have the five-percent cap as does St. Mary’s.
Hewitt pressed for a motion to immediately lower the cap from five percent to three percent but Commissioner John O’Connor [R-3rd District]. argued for a public hearing instead
Regarding Hewitt’s motion, Jarboe said, “I am not sure we can do it now.” Commissioner President Randy Guy [R] said he agreed with Jarboe
Hewitt then amended his motion to go for a public hearing instead. His idea of lowering the cap could be considered along with other citizen suggestions, including raising the cap. The Tuesday, Nov. 1 hearing will be at 6:30 p.m. in the commissioners’’ hearing room.
The discussion about the Homestead Tax Credit was preceded by a discussion about tax credits for senior citizens. The county currently has two senior tax credits that start at age 70: one matches the State Homeowners Credit and the other caps the assessment for those with incomes of $80,000 or less. Under the state match, $277,701 worth of credits were given last year and under the county program $619,172 were given.
The county has a new potential tool for its tax credit tool box with the signing in May of a bill by Gov. Larry Hogan. Under that programs tax credits are available for people 65 years and older who have lived in the same house for 40 or more years and for veterans 65 and older.
Cudmore and County Treasurer Christine Kelly told the commissioners it would be difficult to predict how many people over 65 have lived in their homes for 40 or more years as those records are not kept. It might be easier to identify veterans more than 65.
The county’s population 65 and over represents 12 percent of the total population, or 5,630 households, which would be the maximum exposure for the county under the new bill. The county is allowed to give up to a 20 percent tax credit, which would hit the revenue bottom line to the tune of $2.8 million.
It was suggested to Kelly that she send out a questionnaire to find out how many people may be eligible for the program.
Cudmore said she was presenting the information for the commissioners to digest and they could consider whether to implement the new tax credit program when they begin budget deliberations next year.
As part of the potential deliberation, Morgan noted that the county tax credit for incomes $8,000 or less is generous. “We are way, way higher than anybody in the state,” he said.
Contact Dick Myers at dick.myers@thebaynet.com