Md. cities to raise property taxes

Cities across Maryland are slashing services to make up for state funding losses and finding out that the cuts just won't be enough. Gaithersburg is considering a property tax increase for the first time in four decades, and Rockville is mulling fee increases.

"Our main objective right now is to get to 2015," said Gaithersburg finance director Harold Belton. "And we're looking at anything that will help us sustain the city through 2015."

Maryland cities' main source of funding comes from the state in the form of highway user revenues -- money allocated for transportation infrastructure, construction and building maintenance. The Maryland General Assembly slashed that funding by $244.5 million -- or 90 percent -- by extending cuts from last year into fiscal 2011. Belton said Gaithersburg is considering a 5-percent property tax increase, which would cost residents about $250 more annually on a house appraised at $495,000. The increase would generate about $5 million in a year. Rockville cut enough fat out of the fiscal 2011 budget to avoid tax increases, but fee increases are still being considered, said city spokeswoman Marylou Berg.

"This is an enormous hit," she said, adding that Rockville is set to receive $240,000 in state funding next year, compared with $2.67 million in fiscal 2009.

Montgomery County Executive Ike Leggett's proposed energy tax increase also would affect residents in Gaithersburg and Rockville. Leggett's plans could raise county residents' utility costs by an average of $60 annually. Officials in Maryland's third-largest city, Bowie, have proposed a 2.5-cent property tax rate increase to raise $1.6 million in the next year. City Manager David Deutsch said Bowie budget leaders have exhausted all their optionswhen it comes to raising revenue. Two-thirds of the city's $60 million proposed budget for fiscal 2011 relies on city-generated revenue -- a 20 percent increase from last year.

Much of that revenue will be coming from a speed camera program Bowie has the authority to expand, thanks to new legislation. But Maryland's cities are left with relatively few options when it comes to raising revenues, and the Maryland Municipal League wants to change that. Director Jim Peck said he will push Annapolis next year for more revenue-raising authority on behalf of Maryland city governments -- additional fees and taxes could be near, with the state's local cuts set to continue into 2012. SOURCE: Washington Examiner