Whether residents in Carroll County will be paying more, less or the same in taxes will most likely be decided during the Carroll County Board of Commissioners' final budget session today.
Commissioner Doug Howard, R-District 5, proposed a plan during the commissioners' meeting Wednesday to decrease the county's real property tax rate — which affects businesses and is based on the value of office equipment, tools and machinery, among other things — every year through 2021 and lower the income tax percentage by one-hundredth of a percent every year from 2019 to 2021.
The total revenue reduction in fiscal year 2016 would be only $82,500, but once the decreased income tax takes effect, the reduction would climb to about $650,000 in 2019, eventually reaching roughly $1.5 million in reductions by 2021.
He followed his proposal with a suggestion that the commissioners should agree to use any additional revenue in future years over what staff has projected for education funding and to justify further tax reductions. Howard said the reduction, while not significant until later years, will "send a message" to businesses looking to locate in the county.
"This $82,500 does nothing for the [Carroll County Public School System] but it does offer some relief for small businesses," he said. "Every year we should have some measure of consideration for businesses."
Commissioner Dennis Frazier, R-District 3, said a tax reduction cannot be justified.
The budget as it stands, Frazier said, does not adequately fund public schools, take into account a salary increase for the county's Health Department employees or an additional raise for Carroll Community College employees, he said.
Frazier countered Howard's proposal with one of his own. He said a two cent real property tax increase, which would generate about $3.6 million in additional revenue in fiscal year 2016, would be enough to cover the roughly $2.7 million difference between county funds slated for public schools and the school system's request, and would fund the salary increases for the health department and college, leaving about $300,000 for one-time funding.
"Without this tax, we will not have the money," Frazier said.
Commissioner Stephen Wantz, R-District 1, said that staff's forecasted revenue increases through 2021 is reason to believe a tax increase might not be needed.
"I have told people I will not raise taxes to balance this budget; I truly think there is a way," Wantz said. "I think there is some room here without raising taxes to get to next year. We've seen increased tax revenue and I think that will continue."
Frazier then asked the board what else it could do to meet the county's agencies' and allied organizations' requests — totaling about $25 million — that it has not already done.
Ted Zaleski, director of the Department of the Management and Budget, said the areas identified as flexible spending each carried with them consequences if reallocated. The only thing left for the commissioners to do to make up for the shortfall in education funding is to go agency by agency identifying services that could be reduced — and possibly eliminated — Zaleski said.
The county's top eight revenue generators are projected to increase by about $10 million in fiscal year 2016 compared with last year, Zaleski said. He added the caveat that while he and his staff have attempted to project county revenue and expenditures for the next six years, they cannot predict the future.
"We know we can't accurately project revenue and expenditures six years in the future," Zaleski said. "We will be wrong, but we will be better off by trying to plan for six years."
After listening to both proposals, Commissioner Richard Rothschild, R-District 4, said he disagreed with both and made a motion not to raise taxes in 2016. Though he tabled the motion after several commissioners expressed concern that they were not far enough into the budget process to make such a determination, Rothschild said neither Howard's nor Frazier's stances were warranted.
"Any governing body that increases spending while cutting taxes is reckless," Rothschild said. "And those who increase funding to raise taxes are liberals."
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