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Annapolis City Council considers proposed real property tax increase that would mean $1.5M in new revenue

Annapolis Mayor Gavin Buckley talks with guests at the City Hall Open House holiday party at City Hall in Annapolis.
Annapolis Mayor Gavin Buckley talks with guests at the City Hall Open House holiday party at City Hall in Annapolis.

The Annapolis City Council held a public hearing Tuesday to keep the city’s property tax rate flat, a move that would result in higher tax bills for many residents as property values will increase under a three-year phase-in as required by the state.

For the next fiscal year, beginning July 1, the city is expecting an estimated 3% increase in the real property assessable base, which Finance Director Jodee Dickinson stressed is not a tax rate increase, but part of a three-year step increase in property values as required by the state that saw a 9% increase overall in property valuations when properties were assessed two years ago.

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This occurred in the last two years, Dickinson said. “Your property value is going up 3% and your taxes go up.”

“Like they did last year and the year before,” Buckley said.

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The proposal suggests that the current tax rate be reduced by $0.0215 to $0.7165 per $100 assessed to maintain the constant yield tax rate — to continue collecting the same amount of taxes as the year before — or do as the city is proposing to keep the current rate of $0.7380 per $100, which would result in the $1.5 million in new tax revenue.

The new revenue is factored into the proposed 2021 budget, said Alderman Ross, Arnett, D-Ward 8, and chair of the Finance Committee. If the proposal were not approved, money to balance the budget would have to come from somewhere else in the form of cuts such as cost of living deferrals, furloughs or even closing one of the city’s three fire stations, Arnett said.

Arnett and Fred Paone, the lone Republican on the council from Ward 2, said they have received a great deal of feedback from constituents worried about the proposal.

In a letter to Mayor Gavin Buckley, Debra Dillon, president of the Eastport Civic Association, criticized the proposal and demanded that it be withdrawn.

“The City’s actions are particularly egregious and tone-deaf in the midst of the pandemic,” she wrote. “We are deeply disappointed in our leadership. Mr. Mayor, you promised Annapolitans that you would not increase taxes and are using semantics to camouflage a tax increase at a time when additional, unnecessary financial burdens should not be imposed.”

“There is a misunderstanding on the part of many but this is a tax increase not a tax rate increase,” Arnett said.

Paone said he’s tried to explain the distinction but his constituents still remain concerned.

“It’s money that is significant and important to people,” he said. “It’s something we frequently in the past have just glossed over... I don’t think we can ignore this as a council. It needs to be looked at.”

Public testimony on the proposal will be accepted for seven days as required by law, Dickinson said. Additional discussion will continue ahead of the next council meeting on June 8.

Another contentious piece of legislation that would allow accessory dwelling units — known colloquially as in-law flats — in all zoning districts that allow single-family detached dwellings. It was delayed until July.

The bill, O-39-19, would diversify the city’s current housing stock, allowing the new spaces to be rented to low-income and workforce populations, its sponsors say. The bill’s critics say the legislation is flawed and could have the opposite effect, causing unintended gentrification.

The sponsors plan to work on several amendments to the bill issues such as grandfathering existing ADUs and ensuring that low-income and workforce populations have access to or are able to afford the units, said Alderman Marc Rodriguez, D-Ward 5, one of the bill’s three sponsors.

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“I think there is broad support in terms of the intention of the accessory dwelling unit legislation and intent of bringing affordable housing to Annapolis," Rodriguez said, and the amendments will improve this legislation.

Alderwoman Sheila Finlayson, D-Ward 4, asked to have the legislation go before the Annapolis Planning Commission, which originally called the bill “flawed,” to have a chance to approve the amended legislation.

Later, the council unanimously passed O-11-20 allowing members of the council to attend up to three council meetings electronically during a calendar year for “serious extenuating circumstances."

“We’ve demonstrated that this is very doable for us,” said Finlayson. “The technology is there.”

Other business

During Buckley’s opening statement, he asked for a moment of silence to remember former city finance director Bill Tyler who passed away from COVID-19 on April 25. Tyler served as finance director for 23 years from the 1970s to the mid-1990s. He was 84.

Dick Franyo, co-chair of the Small Business Recovery Task Force, asked the council to consider allowing restaurants to expand their seating into the streets, sidewalks and parking lots to form what have been dubbed “recovery zones.”

“We need to open up outdoors for the next six months,” Franyo said. “We are facing a crisis and we need your help for this recovery effort. Annapolis does not want to lose its charm that we all love.”

During the meeting’s public comment period — which has been reduced to Buckley reading the name and address of the individual who submitted testimony through the city website — several councilmembers questioned why the city has yet to expand testimony for further public input. Paone suggested a city staff member read out the testimony into the record, as has been done in other jurisdictions.

“There is no substitute to see people actually presenting it but to not have it read is really doing all of our constituents are a great disservice,” Arnett said. “I would urge to reconsider how we are handling this.”

Testimony may be submitted at annapolis.gov/publictestimony, which now includes a spreadsheet listing each individual’s name, address and testimony, said City Clerk Regina Watkins-Eldridge.

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