Published: September 05, 2008 09:39 am      

Bill would decrease tax rate on county property assessments

Washington, Garrett paying less on homes

CUMBERLAND — The Allegany County commissioners Thursday convened a public hearing on a code home rule bill designed to lower the Homestead Tax Credit rate to 7 percent from 10 percent.

The bill, expected to be voted on at the Sept. 11 commission meeting, would lower the taxes levied on property assessments beginning July 1, 2009. The credit would be extended only to owner-occupied homes and not commercial buildings, rentals or second-home properties.

County Attorney Bill Rudd noted the bill would “have a negative effect on revenue” in future years. Money generated from property tax assessments is the only revenue stream that saw an increase during the last fiscal year, officials have said. And it is the only source projected to have an increase this fiscal year.

Still, 7 percent isn’t as much of a reduction as some would have liked. The commissioners initially desired to lower the cap on annual assessments to 5 percent to be more in line with Garrett and Washington counties. They have cited an uncertain state and national economy as reason for refraining from the 5 percent cap — for now, at least.

“We have looked at 5 percent,” said Commissioner Jim Stakem, noting that rate would have decreased the county’s collections by more than $1.25 million. “We felt that was just too much. We don’t know how the other (revenue sources will perform).”

The county will lose a little more than $700,000 at a 7 percent cap.

Cumberland resident Jim Combs said he appreciated the 3 percent decrease but urged the commissioners to get to 5 percent as soon as possible. He said there is a large group of county residents who live on fixed incomes who can’t afford 7 percent.

“There is a large predominance of people on fixed incomes,” Combs said. “Most of them are going to die in that house.”

Combs said it was ironic that he paid nearly $2,000 in county taxes on his Allegany County home, valued at $300,000, while a house he owns in Montgomery County, valued at $200,000, resulted in a tax bill of only $486.

“That’s a big difference,” Combs said.

Cresaptown resident Jo-seph Shipley agreed with Combs that a 3 percent reduction was nice but not satisfactory. As a student of “Reaganomics,” Shipley said it’s a well-known fact that lower tax rates stimulate economic activity.

Shipley said he felt the assessment process was flawed and resulted in “over-inflated” values for properties.

Contact Kevin Spradlin at kspradlin@times-news.com.