ROCKVILLE – Echoing a need to reduce class sizes, close the school achievement gap and provide more services to residents, the Montgomery County Council voted T in favor of a proposed property tax rate hike.
The 8.7 percent increase would raise the rate from 98.7 cents per $100 of assessed value to $1.02 per $100 in the Fiscal Year 2017 budget. The council is set to formally approve of the increase Thursday.
It would be the largest property tax hike in the County in seven years and exceeded the County charter limit. It required a unanimous vote from all nine member of the council in order to pass.
In FY ’17, a homeowner would pay $4,075 in property taxes on a $464,441 assessed home, the average home value in the County, up $326 from the previous year.
Homeowners who occupy their homes will receive a $692 property tax credit offset some of their taxes.
After the council passed its 3.94 cent tax increase, County Executive Ike Leggett said the council’s decision to add $25 million to his budget proposal is a mistake that will eventually lead to either major cuts in future budgets or another large tax hike.
“You have exhausted your flexibility for the future on this proposition,” said Leggett of the council’s budget.
Leggett said most of the additions to the budget by the Council were worthy causes but he questioned whether they were fiscally responsible decisions.
“The question is not whether they are good, it’s whether you can afford it,” Leggett said.
County Council President Nancy Floreen (D) defended the Council’s vote.
“At the end of the day we’re making major investments in school and other county infrastructure and that’s frankly why people come here,” she said. “That’s what makes being here an experience that people chose.”
Council members said they justified the tax increase in order to reduce class sizes at an ever-growing MCPS, to cover the cost from the U.S. Supreme Court’s decision in Comptroller of the Treasury of Maryland v. Wynne and to cover lost revenue from an economic slowdown.
But after the Maryland General Assembly passed a bill relieving the County’s burden in paying back taxpayers for the Wynne decision, Leggett amended his proposed tax increase from $27 a month to $21.17 for the average homeowner.
However, the council disagreed.
Instead, they decided the originally proposed tax increase needed to stay in order to fund an added $25 million to the $3.5 billion set aside in the budget for schools and services.
The additional money includes $ 4 million to the public education fund, $4.5 million to Montgomery College and $4 million for publically financed campaigns.
After the vote Council member Hans Riemer (D-At large) said taxes had “held steady” in the County for the last seven years and the council needed to raise taxes and to fund an increase in services.
“I think our residents get benefit from what we’re doing, it’s not a situation where they’re paying taxes and getting nothing for it,” Riemer said. “Everyone benefits when the schools system in this county is successful, and everyone benefits when we have other important services adequately funded.”
One the thing the council did not change from Leggett’s proposed budget was the $89 million above the maintenance of effort for MCPS.
That more than doubles last year’s MCPS maintenance of effort of $44.4 million.
In total, MCPS spending makes up 46.5 percent of this year’s $5.3 billion budget, costing $2.45 billion.
The budget and the property tax increase will take effect at the beginning of the new fiscal year on July 1.