Town Crier for March 2003
Fair Summary of Resolution 03-CR-02
Finance Chair & Ward 3 Councilmember
Resolution 03-CR-02 was introduced for first reading in February and will be considered at the March legislative session. The charter amendment proposed is to change the tax cap from 42¢ per $100 to 50¢ per $100 of assessed valuation. Background on the charter change is provided below.
History
The town property tax cap has not been changed since 1990 and has been at its limit of $1.05 per $100 of assessed valuation since 1992. In 2002, the Maryland legislature revised the assessment criteria making all properties assessed at 100% of their value instead of 46%, which was in place for many years. At the same time it was mandated that the tax rate levied by cities/counties be reduced to allow cities/counties to receive the same amount of revenue from properties. In Riverdale Park's example our tax cap, the highest amount of tax rate that can be levied, was $1.05 per $100 of assessed valuation. Under the new law this figure is now 42¢ per $100 of assessed valuation-which allows our government to receive the same tax revenue as previous.
Why Change the Cap?
During the past 60 days of the Maryland General Assembly session, we have received numerous indications that the state revenue, which has been provided to cities/counties for many years, will be reduced. The reductions will have a dramatic and serious impact upon our town budget. As you are aware the state is facing a $400 million imbalance in the state budget. The governor has proposed a major slot machine program to cover much of the shortfall. At the same time, the Town of Riverdale Park anticipates significant reductions from other revenue sources as well. For example, our share of income tax may be reduced by as much as 10%, which could amount to a $25,000 loss. Our state highway user funds are being reduced by over 26% or $60,000. The University of Maryland, a non-tax paying entity, is acquiring many acres of industrial property located in the town, which will reduce our property tax revenues by a significant amount. As this article is being written, we are being informed of the possibility of a reduction in our state police aid funds and other cuts of our share of $100 million of the state shortage.
Rationale
We have found the services being provided to our residents necessary and are at a level that a great majority of our residents wish to continue. We believe a safety net should be provided to assure that no service is reduced as a result of the loss of state shared revenues. We also hope and pray that the state will find ways to balance the budget, but not at the expense of cities and counties, thus saving us the anguish of raising taxes or cutting services.
We request our residents to attend the hearings on this legislation or call or e-mail your council member to voice your opinion.
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