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Lower Taxes in Wicomico or Just a Ruse?

April 22, 2022 - by Miriam Garman

There is always much debate about the pros and cons of the tax revenue cap here in Wicomico County. Are we getting lower taxes or is someone taking advantage of the numbers?

There is always much debate about the pros and cons of the tax revenue cap here in Wicomico County. Some people approve of it as it keeps property taxes low. Others do not, as they feel it makes the income tax rise and limits revenue for the county. Based upon John Psota’s proposed Fiscal Year 2023 budget, the Acting County Executive wants the County Council to impose the maximum property tax rate to balance his proposed expenditures. His budget also includes substantial federal funds such as the American Rescue Plan and county surplus for that purpose as well.

The property tax rate that Psota wants to the council to impose in FY23 (.9070) is lower than this year’s rate (.9195). Seems like he is cutting the tax rate. This could not be further from the truth. It is because of our tax revenue cap. The county charter specifically states “…revenues derived from taxes on properties existing on the County real property tax rolls at the commencement of the County fiscal year shall not increase, compared with the previous year, by more than two percent…”. Because the assessable property tax base in FY23 increased by 4.43%, the maximum tax rate must be lowered to .9070 to stay within the revenue cap.

So, in summary, our Acting County Executive wants the Council to tax the citizens of Wicomico County to the max to balance his proposed increased spending. This is quite alarming for many reasons. One reason is the all the excess revenue received last year (12 million dollars) and the anticipated additional amount this year. The second reason is that the county would get the same amount of property tax revenue as this year if the tax rate in FY23 in lowered to the “constant yield” rate (.8893).

A question for our Acting County Executive: Don’t you think it’s time to forgo the highest possible property tax rate in FY23 especially with another huge, anticipated increase in income tax revenue, possibly more recordation taxes, and interest on the County’s surplus funds?

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