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Search is on for tax rate solution City officials seek persuasive argument to support reduction


Still stinging from last year's defeat, Annapolis officials say they're determined to win the annual tax battle with the county this year -- and this time they have a new game plan.

But determination and a game plan may not be enough. City officials say they have yet to find a persuasive argument to get Anne Arundel County to lower the property tax rate for city property owners.

Last week, accountant James Lindsey, a consultant hired by the city, determined that "all the information that goes into the county tax formula is correct," said John L. Prehn Jr., the city administrator and point man in tax rate negotiations between the city and the county.

"He said we can open up or contest some items that the city is being charged for by the county, but that might perhaps damage the city's position," Prehn said. "We're exploring other avenues."

Last spring, city property owners saw an 8-cent increase in their tax rate, and the resulting dispute landed the city and the county in court. After several fumbles by a disorganized city leadership, Annapolis lost.

City officials have played it differently this year. They have exchanged a steady flow of letters with county officials, hired Lindsey to examine the formula for mistakes and put together a negotiating team to deal with the county exclusively on the tax rate.

"We're walking a very careful line this year," Prehn said. "We want to avoid the extreme level of discomfort that occurred last year, of course, at the same time realizing that we're trying to fight for the best interest of the taxpayers of Annapolis.

"It's not going to be easy," he said. "In fact, we don't even know for sure how strong our case will be with the county, or how strong their case will be against us."

The fight over the property tax rate is over how much state capital property owners should pay for county services such as schools, jails, courts and roads, and how much credit they should receive for the city police, garbage collection and other services supported by city tax levies.

County property owners pay $2.38 for every $100 of assessed value. For city property owners, the county subtracts $1.01. When combined with their separate city tax, Annapolis property owners pay $3.06 per $100 of assessed value.

City officials say that rate is too high, but county officials counter that the numbers are based on a formula to which both governments agreed.

County Councilman William C. Mulford II, who represents Annapolis, said, "If there's a problem with the formula, show us where it's wrong. They can't just say it's because we don't like the result.

"Show us where the proper formula isn't being applied," said Mulford, who was highly criticized in the spring by city officials who accused him of siding against city taxpayers. "We're more than willing to resolve this issue."

A meeting of county and city officials has been scheduled for March 6.

City officials say they have no time to lose. County Executive John G. Gary is expected to release his budget proposal in April, which will include the tax differential, and the County Council will set the credit for Annapolis property owners when it approves the budget in May.

County financial officer John Hammond, responsible for calculating the tax rate, said of this year's negotiations: "I think it's much better to have a centralized point person who is responsible for the process. It's certainly made our job in the county much easier to deal with Mr. Prehn in the communication process.

"If we continue like this, I'm sure we can work out a solution," Hammond said. "We're certainly willing to consider any meaningful proposals that they're willing to put into it."

Pub Date: 2/17/97

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