Commissioner Dennis Frazier's remarks during a budget session Tuesday were met with silence. The Republican commissioner said the only way to accommodate more than $25 million in new funding requests from county agencies and allied organizations is to raise taxes.
"I'm hoping to find another way but I don't see it," Frazier, District 3, said at the meeting. "There's nowhere else this [money] can come from other than a tax increase."
Anyone sitting in the Reagan Room of the Carroll County Office Building could've heard a pin drop, and talk did not resume until the commissioners moved on to another topic. In separate phone interviews, the commissioners — including Frazier — said they were reluctant at best to raise taxes, but while the incumbents remain committed to resisting the notion, several of the newcomers to the board realize they might have to consider it.
The comment was made after the commissioners began discussing the Board of Education's $15.8 million funding request, which is $13.8 million more than what county staff has recommended in the fiscal year 2016 operating budget.
The proposed FY16 operating budget is about $367.5 million, and the current fiscal year's operating budget is $368.4 million.
"If we aren't looking at [the possibility], we aren't doing our job," Frazier said in an interview Friday. "If we go by what we have left, we have about $300,000 left in one-time money and we are already [$474,000] out of balance. I'm not in favor of cutting salaries, employees or funding, so where does it come from?"
Commissioner Stephen Wantz, R-District 1, said Friday he has a different perspective on the budget than the other commissioners. For years, Wantz, a past president of the Carroll County Volunteer Emergency Services Association, presented the organization's budget request to the commissioners.
"In my mind, I'm going to do everything I can to make sure we have adequate funding and a balanced budget without raising taxes, but we may be forced to consider it," Wantz said.
Commissioner Richard Weaver, R-District 2, said that while some of his constituents have told him they would "be all right" with a tax increase, the majority he has spoken to say they would be OK with "most anything" but raising taxes.
"I'm really not decided yet, but I'm resistant to raising taxes," Weaver said. "I think we can get through [the budget] without raising taxes, but we have to see how this whole thing plays out."
He said one of his priorities is properly funding Carroll County Public Schools — Weaver is a former teacher — and some of the school's budget will rely on what Republican Gov. Larry Hogan decides to do regarding optional education funding allocated in the state's budget.
"We can predict what we will have [from the state] but you don't really know," Weaver said. "I'm hoping the state can still make some changes to help us out with a couple things, but that may be optimistic."
Commissioner Doug Howard, R-District 5, said the board is close to getting the budget completed without raising taxes, and he has no interest in doing so. Howard's intention is to continue lowering taxes during the remainder of his term.
"One of my priorities is lowering the business personal property tax and income tax in the later years [of our term] to attract businesses and citizens," Howard said.
He also said raising taxes to accommodate budget requests, while unpopular, is a quick and easy fix, but is something that is not always in the best interests of the his constituents or Carroll.
The commissioners have found other solutions to meet part of the public school system's request, he said, including a suggestion by Howard to take a portion of the county's income tax revenue normally dedicated to the school system's capital budget and reallocate it to its operating budget through FY21.
"If we start using taxes as a solution, it would become too easy to do, and we would make it so citizens wouldn't want to be here," Howard said. "We've seen it on the state level; before you realize it, you become a very undesirable place. It always starts small, but over time it accumulates very quickly."
Howard said previous commissioners' decision to lower both the real property tax and income tax sent the "long-term message that [Carroll] will become a competitive place to do business."
The proof, he said, is simple: Business growth is projected to more than offset what would have been brought in if the tax cuts had not been made.
"Raising taxes will have a detrimental impact on our ability to attract businesses," Howard said. "We've seen hundreds of million of dollars invested in our community and that translates into building our economic base."
Conversely, he said, drastically lowering taxes or reducing the level of county services by decreasing funding are not answers to the budget issues either.
"Neither of those strategies works in the long term," Howard said. "Building the tax base is the only solution."
Commissioner Richard Rothschild, R-District 4, said the school system's funding request is not an adequate reason to consider raising taxes.
"Republicans don't raise taxes to give more money to a shrinking school system," Rothschild said.
He also said he opposes Howard's "financial gymnastics" to create new recurring spending at the expense of other recurring budgetary obligations.
"[Reallocating capital budget funding] is irreconcilably incompatible with his statement that he opposes tax increases," Rothschild said. "His spending chickens will eventually come home to roost. I oppose Howard's budgetary Ponzi schemes and will continue to oppose any tax increases."
Frazier said that if the commissioners refuse to consider raising taxes, it will only harm Carroll in the long run.
"When you go up to hornets nest you don't wait for it to get bigger before you deal with it," Frazier said. "Let's make the commitment to employees, the school system, the Sheriff's Office and nonprofits to fund them to provide adequate services to the people."
In Carroll County, the real property tax is set at $1.018 per $100 of assessed value; the personal property tax rate — which affects businesses and is based on the value of office equipment, tools, and machinery, among other things — is $2.515 per $100 of assessed value; and the income tax rate is 3.03 percent.
County staff is projecting that during fiscal year 2016 through FY21, every additional penny of real property tax will result in $1.8 million in additional county revenue; and every additional penny of personal property tax will result in $55,000 in additional county revenue. For every additional .01 percent of income tax, the county will receive $200,000 in FY16 and $400,000 from FY17 to FY21.
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Regarding the real property tax rate, for every penny increase, owners of a $250,000 home would pay an additional $25 annually; for a $500,000 home, it would be a $50 annual increase; and the owner of a $750,000 would pay an extra $75 annually.