Aberdeen city officials are in the preliminary stages of compiling their fiscal year 2016 budget, and the newest Harford County tax could deliver an immediate windfall, as hoped for, City Administrator Doug Miller said earlier this week.
A 6 percent county hotel and motel lodging tax is expected to produce enough revenue for the city to put toward Ripken Stadium maintenance and in turn lower the property tax rate from $0.68 to $0.66 per $100 of assessed value, Miller said during Monday afternoon's city council work session.
Harford County government is expected to begin collecting the new tax on Monday, March 23.
With one of northeastern Maryland's largest concentration of lodging facilities, Aberdeen officials have been lobbying for decades to tax the city's visitors. Last year, the Maryland General Assembly finally approved the authority for Harford County to levy such a tax, and in January the Harford County Council passed the necessary local legislation to impose the tax.
Under the county legislation, 50 percent of the lodging tax revenue collected within the Aberdeen city limits will be remitted to the city. The remainder will used by the county, although with tax proceeds collected from hotels at other locations, for grants to local organizations that promote tourism activities and events.
Aberdeen officials have long pointed out that Ripken Stadium, which was built mostly with city and state funds and a much smaller contribution from the county, is arguably one of Harford's most visited tourist destinations. In addition to paying off bonds it sold to build the stadium, the city is responsible for maintenance and repairs.
In addition to the new room tax revenue, the city is also expecting a slight increase in highway user revenue from the state, Miller said.
He warned, however, that the city's assessable tax base is also expected to decline from the current budget, "which is not a positive thing."
Miller said the target date for presenting an initial budget to the city council is April 13.
He met with senior staff Tuesday to instruct them to create status-quo budgets and to not ask for new personnel and make very limited requests for capital purchases.
"We are not panicking, but we are not looking for any expansion, as our revenues have constricted," he said.
The city is forecasting $445,000 from its portion of the hotel tax, Miller said Wednesday. The County Auditor's Office has estimated the tax will yield $2.7 million annually countywide.
"We don't have a historical trend to use in our forecasting so we will be a bit conservative for FY '16," he wrote in an email.
Miller is also predicting $14.4 million for the city's total general fund revenue. Water fund revenue is predicted at $3.1 million and sewer fund revenue is $3.9 million. The city's current budget is $14.1 million.