Taxpayer pokes hole in Rising Sun’s ‘brilliant’ tax plan
— Jeff Jackson is now paying more for taxes on a tiny strip of property he owns than the 56-square-foot patch is worth.
That’s what Jackson told the mayor and commissioners Tuesday night. Jackson and William Cather came to the Rising Sun town meeting to expose a problem with the recently adopted change to utility billing that moved a portion of the monthly water, sewer and trash bill to the property tax bill.
These properties in question are undeveloped.
“There’s no water or sewer service and no trash pickup either,” Jackson said, adding he is paying for services he does not receive.
Cather doesn’t live in town, but his vacant properties are within town limits.
“If the town needs the money, they should have raised the taxes,” he said.
Town officials reclassified the portion of the water and sewer debt service and the cost of trash collection and rolled it into the property tax bill. Also the property tax rate was raised — for the first
time in 20 years — from 40.6 cents per $100 of assessed value to 48 cents. However, by merging the debt service some property owners who itemize will see the increase costing them less than $1.
Commissioner Dave Warnick called the plan “bloody brilliant.”
Cather disagreed, calling it “taxation without representation.”
“I got on the IRS website. You cannot deduct this,” Cather said. “It’s a gray area open to interpretation. If you do get audited you may need a tax attorney.”
Calvin Bonenberger, town administrator, assured Cather the additional amount — averaging $380 per property — was deductible. Having had conversations with various sources, Bonenberger said he was certain that the deduction was applicable, noting Rising Sun isn’t the only town in Cecil County taking advantage of the policy.
While Jackson said he understood why the move was made, Cather saw the damage waiting on the horizon if owners of rental properties pass the increase onto their tenants.
“The center of town is empty now,” he said. “You pass this onto the renters, what are they going to do?”
Bonenberger said renters would likely see no increase because of the deduction property owners will realize on federal tax returns. Those who do pass the cost onto tenants, those tenants will have a lower cost for water and sewer service, so the cost of the debt service would be the same as before.
Commissioner Brian Leishear said the board would revisit the resolution in light of the impact on undeveloped properties.
Saying he had already cut his check to go into the mail the next day, Cather asked how soon any action could be taken.
Mayor Travis Marion told Cather to expect some word at the next town meeting.
Meanwhile, Bonenberger offered to research for Jackson on the possibility of merging his three parcels into one, which would lessen his tax burden.
Jeff Jackson told the Rising Sun mayor and commissioners that the increase in property taxes coupled with the new policy that rolls debt service and trash pick up onto the property tax bill results in him paying a tax bill that the three times what one of his parcels is worth.