The property tax rate is usually one of the most hotly debated aspects of the county budget process each year, and 2020 was no different.
In a 4-3 vote Tuesday, the County Council adopted the rate suggested by County Executive Jan Gardner (D) in her proposed operating budget: $1.06 per $100 of assessed value.
That decision set off a firestorm of debate in the local political channels on social media, as many claimed the council voted to raise property taxes on residents during the middle of the coronavirus pandemic.
What actually happened is a little more complex, and involves the state Department of Assessments and Taxation (SDAT). Even though the majority of council members voted to keep the tax rate level, county residents who have had their homes re-assessed by SDAT — and saw an increase — will pay more in property taxes.
Still, the Republican members of the council — in what has been one of the few, if not only, party-line votes since the new council was seated in December 2018 — argued the constant yield tax rate should be adopted. The constant yield rate means the rate would be lowered to a number that would generate the same property tax revenue for the county as the prior fiscal year. This year, that rate was $1.0344 per $100 of assessed value.
Council members spent almost an hour debating where the tax rate should be set. Here is a look at just some of what each of them argued.
Council Vice President Michael Blue (R-District 5)
Blue said due to the “unprecedented” times of the coronavirus pandemic, council members should do their part to provide some relief to county taxpayers, and adopt the constant yield tax rate.
Blue recounted a recent conversation he had with one of his customers.
“Of the taxes that anybody will pay, property taxes, she said, are the only tax that you could potentially recoup over a period of time, whether you have more borrowing power, more equity, or your property is worth more,” Blue said. “I agree with that. I don’t know that it’s an airtight argument, but if you look at all the taxes we pay, that’s really the only one you may be able to recoup over a period of time.”
Councilman Phil Dacey (R-At-large)
One of Dacey’s main arguments was that if council members weren’t going to lower the tax rate and provide some relief during the pandemic, then he couldn’t see them ever lowering it.
“This is the time, we’re literally in an emergency right now,” Dacey said. “And we’re talking about taking more money out of people’s households, to give money to the government ... in my view, that’s wrong, I think we should be talking about ways to put more money in people’s pockets in these tough times.”
Councilman Jerry Donald (D-District 1)
Donald argued that thousands of new homes coming into the county housing inventory this past year was a key part of why assessments may be going up for many property owners.
He also said the county has done wise budgeting and built up reserve accounts and established a AAA bond rating for the county, which saves taxpayer money when the county has to borrow for capital projects. He was comfortable with staying at the proposed rate.
“If we get through this crisis without having to go ... deeply into reserves ... we will show that we are maybe the best managed county in the United States,” Donald said of the county’s financial outlook.
Councilwoman Jessica Fitzwater (D-District 4)
Fitzwater pointed to the “quality of life” argument for why assessments, and thus taxes, go up. More specifically, she believes that because the county offers an array of services, amenities and strong schools, property values continue to increase.
Fitzwater emphasized she was only speaking for herself about paying an extra $7 a month in property taxes due to the council adopting the constant rate, and not the constant yield.
“I am more than happy to keep paying that extra $7 per month to make sure that Frederick County keeps being the great place that it is to live,” Fitzwater said.
Councilman Kai Hagen (D-At-large)
Hagen provided some historical perspective on why he felt the constant rate property tax was necessary.
He was part of the Board of County Commissioners from 2006-10, that had to make many cuts during the Great Recession.
“I’m expecting that we will have some difficult budgets ahead ... looking at the next two years, looking at where those resources are going, I think we’re going to make some hard choices about what our priorities are, and what we’re going to be spending on,” Hagen said.
Council President M.C. Keegan-Ayer (D-District 3)
Keegan-Ayer, who has had the responsibility of leading the council through virtual meetings for more than a month, perhaps had the most philosophical or broad-based argument for why to keep the constant rate for property taxes. Those property taxes help pay for schools, sheriff’s deputies, firefighters and emergency medical services, Keegan-Ayer said.
There’s also another important purpose to those tax dollars, she said.
“The government provides a safety net under people during times like this,” Keegan-Ayer said of the pandemic. “... We need to make sure we’re able to provide that safety net that people expect from their government.”
Councilman Steve McKay (R-District 2)
McKay joined Dacey in taking the lead in trying to convince council members the property tax rate should be reduced to the constant yield. McKay made several arguments about adopting the constant yield, but one of the broader ones was the county could afford to do so, because it had high reserves and property and income tax revenue come in over millions of dollars higher than expected in recent years.
“Adopting constant yield this year doesn’t mean it’s going to flatten our revenue year after year after year,” McKay said. “Our property tax revenues would still increase because assessed values are increasing ... what I’m talking about when I advocate for constant yield this year is reducing the rate of growth a little.”