Resolution 18-19 would keep the county’s income tax at the current rate of 2.5%. It is scheduled to be discussed at the May 20 County Council meeting. If the council approves Volke’s resolution with the five necessary votes, the question would be placed on the county 2020 ballot. Charter amendments require a super majority vote.
This is Pittman’s first year as county executive after defeating Republican County Executive Steve Schuh in the 2018 election.
“I don’t think the people who voted for him [Pittman] voted for this,” Volke said. “Don’t think they voted for a totally different vision of government than Steve was offering.”
Volke put in the resolution shortly after Pittman unveiled his budget and a proposed income tax rate increase to 2.81%. That is about a $310 yearly increase for families making $100,000 a year, the county median average household income.
Pittman said he opposes the cap because it would weaken the county’s bond rating, and debt repayments would eat through the capped revenue.
“Councilman Volke's proposed charter amendment creating a permanent ceiling on our income tax rate at a level that ranks us 22 of 24 Maryland counties would be unprecedented and irresponsible,” Pittman said. “Anne Arundel County residents deserve better than that.”
The proposed income tax increase comes after Pittman positioned himself as fiscally conservative during the 2018 campaign. After his election, Pittman posted a photo on Facebook of himself wielding a chainsaw with the caption: “OK department heads. Bring me your budget requests.”
“This is a fiscally conservative and fiscally responsible budget. Both our proposed income and property tax rates rank us 18th of 24 Maryland counties, far below the other big eight counties that provide comparable services,” Pittman said. “We funded less than half of the non-education supplemental requests from our departments, and we cut capital spending by $45 million from last year. I'm hearing a lot more about where we should have spent more than about where we overspent.”
The county already has a property tax cap. That cap prevents the county from increasing the rate to capture new revenues. Under the cap, the county’s property tax rate fluctuates based on previously collected revenues and new construction. The majority of county revenues come from collected property and income taxes.
If the county were to maximize the upcoming tax rate under the cap, it would reduce the rate from 90.2 cents to 90.1 cents per $100 assessed value. Pittman has proposed increasing the rate to 93.5 cents, saying it would capture revenues lost to political, not financial, decisions. Pittman is able to bypass the cap because state law allows capped counties to tweak rates but only to fund education.
Volke’s resolution on the income tax rate is less flexible. It doesn’t allow the income rate to rise or fall depending on the economy. The income tax rate would be set at 2.5% but the council could lower the rate if it wishes. Language in the bill prevents the rate from lowering due to state changes.
Passing this resolution through the Democratically controlled council will be a challenge. Volke needs five votes, meaning he has to convince two of the Democrats to join his cause.
While Democrats have expressed reservations about the tax increases, they also have been supportive of Pittman’s plans to use that money for teacher back raises, hiring 136 more 136 teachers, 10 more police officers, more firefighters and other budget proposals.
Those Democrats may also be emboldened by the seven public budget hearings Pittman held leading up to the budget unveiling. Many of the the residents that spoke at those meetings asked the county to find money for new libraries and recreational needs. Police and fire representatives and some residents also advocated for greater public safety funding.
There were some residents who asked Pittman to not raises taxes. Another asked Pittman to focus on changes to the income tax since it covers all residents unlike the property tax that affects homeowners.
Council vice chairwoman Allison Pickard, D-Millersville, said she opposed the income tax cap because it limits the government’s ability to respond to economical changes.