County closes in on income tax cut deal
April 17 – CUMBERLAND – Allegany County officials announced Thursday that they are closing in on an agreement on income tax rate reduction plans.
The Allegany County Board of Commissioners discussed a rate reduction, sometimes called a piggyback tax, following a proposal by Commission Chairman Jake Shade last month to raise the rate from 3.05% to 3.00%.
Commissioners discussed the process during a budget meeting Thursday at the county office complex on Kelly Road. The debate was not whether to reduce the rate but rather how much it should be reduced. Commissioner Dave Caporale opposed a reduction of five tenths of a percent in favor of a compromise that would include a lesser reduction.
The board was able to consider the rate reduction due to a budget surplus of $4.2 million. The surplus is largely due to increases in the minimum wage, which boosted income tax revenue, and rising property assessments in eastern Allegany County.
“I would go for 3.03%, that would be my compromise on that,” Shade said during the meeting. “We’re blessed with a surplus. That’s what he’s there for. He’s there to fund those budget demands and give some to county employees and give some back to taxpayers.”
Although no final decision has been made, the commissioners agreed that a reduction would be made.
“It will be between 3.03% and 3.04%, but there will be some sort of reduction coming down the line,” commissioner Crade Brodie Jr said.
According to County Administrator Jason Bennett, the county loses about $100,000 in revenue for every tenth of a percent the tax rate is reduced.
Commissioners also agreed Thursday to fund a $95,000 shortfall in the Allegany County Library System budget that could have resulted in reduced hours at all six branches of multiple systems.
“You had to step in or you had to close the libraries,” Shade said after the meeting. “It was a priority and it had to be done, so we did it.”
Officials said they were satisfied that the agencies it funds and the organizations it contributes to did not make exorbitant budget demands.
“All of the requests from our outside agencies, I don’t think anyone made an extravagant request of you,” Bennett said. “Everyone has talked about the needs they have and why they asked for what they asked for. We haven’t changed any of the budget requests.”
“For years we had to ask everyone to apply for an apartment (funding) or take a share,” Brodie said. “Everyone held their ground and helped us through the bad times.”
The board also agreed to allocate a $500,000 increase to the Allegany College of Maryland budget. The college faced increased costs largely due to rising inflation and rising salaries.
“We were also able to fully fund them,” Shade said. “When the work increases, you have to pay more.”
The county also agreed to give employees a 2% cost-of-living increase.
Bennett said budget spending increases would add about $2.4 million to the budget, bringing the total to about $102 million, a 5.5% increase from last year. He said the county would still keep about $2 million of the budget surplus.
“The fund balance is in good shape and it’s just a surplus of that balance. So you’re roughly dividing it…using some, reserving some,” Bennett said.
A preliminary budget will be prepared, according to Bennett, for commissioners to consider next week. A public hearing on the budget will take place in May.
Greg Larry is a reporter for the Cumberland Times-News. To reach him, call 304-639-4951, email [email protected] and follow him on Twitter.