FROSTBURG — Mountain City officials are proposing a property tax increase to offset an estimated loss in real estate values and an anticipated health insurance increase for city employees.
The extra revenue also would slightly increase some city workers' salaries.
"We are trying to make an effort to support the employees," said City Administrator John Kirby. "They're the ones that plow the streets, pick up the garbage, keep the water running, answer the police calls ..."
Right now, Frostburg maintains a real estate property tax rate of 64 cents per $100 of assessment.
However, property value assessments are expected to drop by 0.5 percent beginning in July, resulting in a $10,081 loss in property tax revenues for the city.
In addition to property value loss, officials are planning for a 15 percent increase in city employee health care premiums, all the while struggling to keep salaries sufficient to retain those same city workers.
"If we do nothing, the employees' health insurance costs are going to go up and it's just going to be more money out of their pockets," Kirby said.
The proposed tax rate of 66 cents per $100 of assessment will generate $57,739 in additional revenue, according to figures provided by the city, allowing officials to offset the drop in property values as well as leaving $47,658 for health insurance premiums and pay increases.
Officials are concerned over citizen reaction to the proposed increase, and invite the public to speak at a public hearing scheduled for April 20 at 7 p.m. at Frostburg Community Center on Water Street.
"In this day and age there are people out there that are struggling," Kirby said, "and every increase in their expenses is difficult."
"We understand that people are dealing with a lot these days; it's a very uncertain world and the mayor and City Council are going to listen to comments of the citizens," he said. "It (tax increase) certainly isn't automatic; the April council meeting is when folks can come out and get involved."
The proposed tax increase is 2.6 percent higher than the constant yield tax rate, a state mandate designed to keep property taxes constant from one year to the next.
If a municipalty wishes to increase property taxes for any other reason than to supplement fluctuations in assessment values, and Frostburg is, it must hold a public hearing as to why.