I wanted to remind residents that I’m hosting a Ward One meeting tonight at 7:30 PM in the Community Center Azalea Room on Takoma Park’s budget and property tax rate. Please feel free to attend if you have any questions or comments about these matters. You can also speak out on the budget during the public comment period at the beginning of Wednesday night’s City Council meeting.
At our Wednesday night meeting, the Council will be voting on a series of amendments to the City Manager’s proposed Fiscal Year 2018 budget. When we complete that amendment process (which is known technically as “reconciliation”), we’ll end up with a revised budget package. We’ll have a preliminary vote on that package on May 10, with a final vote scheduled for May 17.
My goal in the budget process is to support continued investment in programs and projects that contribute to the quality of life for our residents and help maintain the features that make our community unique. Within that overall approach, I think it’s important to focus on providing assistance to under-served communities and working to keep Takoma Park an affordable place to live. For me, that translates into reducing spending in areas that will bring our property tax rate below the modest cut from the current rate that’s already in the proposed budget. You can see the impact of various tax rates in the summary at the end of this message.
As a reminder, a net budget reduction of $544,000 will bring spending to a level that would allow the property tax rate to be set at Constant Yield. That’s the rate at which the City would bring in the same overall amount of revenues next year as this year (at Constant Yield individual taxpayers could still see upticks in their property taxes depending on their assessments).
I’m planning to support the following reconciliation cuts (some of which have been put forward as late adjustments by staff): Police Department Renovation Design; Neighborhood Economic Development Improvements; Health Insurance; Equipment Replacement Reserve; Workers Compensation; Police Pension Contribution; and Facilities Maintenance Reserve. These cuts total $750,000, and they are all examples of either dollars that are not needed or for which we have not fully formulated a plan.
I’ll support a few modest reconciliation increases (for example the Council internship program and financial assistance for lower income residents who need help with downed tree removal), and I may support some additional cuts. Of course, my Council colleagues might not agree with me on some of these, but my hope is that we’ll end up with a somewhat lower tax rate than in the current proposal, while preserving funding for key initiatives, like the Library renovation and the Affordable Housing fund.
I’d be glad to answer any questions about the budget, either tonight at the Ward One meeting or in advance of tomorrow’s Council meeting. Meanwhile, I’d like to comment on a few key items.
Library Renovation. As I have written in previous messages, I believe the Library is in serious need of renovation after 62 years of existence. I think it’s reasonable to spread the costs out over 30 years through bonding considering that residents in future years will be using the facility. Under that approach, the annual amount we’ll owe will be under $400,000, which is not much above one percent of our annual budget. The proposed bond is also well within our City Charter guidelines for long term indebtedness. While I understand the concerns that have been raised about the cost and size of the new facility, much of the increase in size is due to relatively modest increases in space for children, young adults, staff, computer use, and programming (so there’s no need to double up in the children’s room), with some additional space required for compliance with the Americans with Disabilities Act.
Affordable Housing. This is the second year in a row that we’ll have set aside funds to begin to address the affordable housing challenge in Takoma Park. Currently, an outside contractor is developing a Strategic Plan for the City on economic development and affordable housing. When that is complete a bit later this year, I look forward to moving ahead quickly on several programs using these dollars, based in part on the contractor’s recommendations. We have already begun one project that’s aimed at providing down payment assistance to moderate income home buyers in the City.
Police Pension. The proposed budget calls for the City to contribute just under $1.4 million into the Police pension in the coming year. That is in line with the recommendations of the independent actuaries who advise us on the pension. I’m willing to support a process in which we exceed the amount recommended by the actuaries, but I think it should be part of a well thought-out, longer term plan, as opposed to an arbitrary number, which is the case with the proposed extra $100,000. I would add that the most recent data I have seen indicates that the unfunded portion of the pension is leveling off, while the funded portion continues to progress upwards, meaning to me that we’re moving in the right direction.
Stormwater Fee. Homeowners current pay $55 annually for various stormwater projects in the City. The proposed budget calls for raising the fee to $92, largely because the way progress is being measured by the State of Maryland has changed (meaning that our progress on treating stormwater may not be as good as we had thought). I think it’s crucial that we continue making moving forward in this area. But I’m reluctant to increase the fee to such a high level when we’re also planning to conduct a survey in the coming year to assess the extent to which the fee is a fair way of measuring how residents contribute to the stormwater improvement process. So, I’ll plan to support an amendment to reduce the fee increase to $10 (producing an annual fee of $65), which would mean a couple of stormwater projects would have to be delayed until the following year.
Please be in touch if you have any comments or questions.
Peter Kovar, Takoma Park City Council
IMPACT OF PROPERTY TAX RATES – CITY OF TAKOMA PARK
Current Rate (Fiscal Year 2017)
$0.5675 per $100 of assessed property value
$568 per $100,000 of assessed value
$2,272 in taxes for $400,000 house
Proposed Rate (Fiscal Year 2018)
$0.56 per $100 of assessed property value
$560 per $100,000 of assessed value
$2,240 in taxes for $400,000 house ($32 below 2017)
Constant Yield Rate (same aggregate amount of taxes as in FY 2017)
$0.5358 per $100 of assessed property value
$536 per $100,000 of assessed value
$2,144 in taxes for $400,000 house ($128 below 2017; $96 below 2018 proposed)
Total Property Tax Impact of Proposed 2018 Budget
Proposed budget estimated to produce $544,000 more revenue than 2017 budget
$224,000 of net reduction in proposed budget equals “one cent” in tax rate
If Council approves net changes to budget of $544,000, we’ll be at Constant Yield