Rising Sun proposes nearly 8-cent tax hike
— For the first time in 20 years, there will be an increase in the property tax rate above the constant yield.
It’s a move to counteract the 22 percent drop in the value of the 901 properties in Rising Sun, plus accounting for an almost 10 percent inflationary increase in operating costs.
Going from 40.6 cents to 48 cents per $100 of assessed value, an increase of 18 percent and nearly 8 cents over the constant yield, will help the town avoid having to dip into its reserves to balance its budget. In the current budget, there is a possibility that as much as $89,000 will have to be pulled from saving by
the end of the fiscal year.
But it’s not all bad news, as the commissioners are considering action that could have some property owners realizing that increase is going to cost them less than $1.
“It’s bloody brilliant,” Commissioner David Warnick said.
The plan aims to provide tax relief, while keeping current services and increasing property values.
If approved, starting July 1 the monthly bill for water, sewer and trash will drop $37. Those costs, including the Bay Restoration Fund and debt service for the town’s water and sewer plants, will be moved to the real estate bill, which can affect the amount of money due on state and federal taxes.
“We’re going to save them a lot on the federal return if they itemize,” Warnick said at the Wednesday night budget meeting. “It reduces their taxable income.”
Town administrator Calvin Bonenberger said that for the average property owner, the tax increase means paying an additional $153.80 per year.
“Divided over 12 months, it’s $12.82 per month,” he said, comparing it to the typical household budget he noted that is less than the cost of cable television. “We still have to charge for it, but we’re moving it to the real estate taxes. Plus we are one of the few towns to give residents that 2 percent reduction if they pay their property tax bill on time.”
For a homeowner in the 25 percent tax bracket who owns a home valued at $209,500, the ability to deduct that cost at tax time could mean a bigger refund.
Warnick had not crunched the numbers yet on the state taxes, but expected even more discounts.
The budget deficit comes from recovering from several years of legal entanglements in the midst of building the new wastewater treatment plant and devising the new water supply system. Town officials have repeatedly stated that the lawsuits have cost hundreds of thousands of dollars that could have been spent on road repair and maintenance, for example.
Another headache is the ongoing repair project at Ryan Drive. What started as a water leak repair has evolved into the discovery of shoddy construction in the 40-year-old neighborhood off East Main Street.
It’s the unexpected that has caused the most angst, however, Bonenberger said.
“About $59,000 of that $89,000 deficit was for snow removal,” he said, referring to the January blizzard.
Bonenberger said the board has been using reserves to balance its budget for several years.
In an analysis comparing Rising Sun’s tax structure, property values and revenue generated, the town still falls into seventh place among the eight incorporated towns, above only Cecilton in the amount of tax revenue spent per person. Bonenberger pointed out that the town tries to do the most with the least.
“As much of a black eye as the town takes, we have structured the budget to get the most bang for the buck,” he said. “If property values had gone up 22 percent, we wouldn’t be having this conversation.”
Toward that end, the new budget has added personnel for the property maintenance program with an eye on targeting vacant and bank-owned properties blighting the town.
“We’re investing aggressively into economic development, improving the business climate which adds jobs,” he said, adding that 80 percent of the revenue generated will go toward economic development.
A public hearing on the budget will be held next month, as early as June 7.