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Budget Town Hall on College Park’s FY 23 City Budget

Council Discusses Ways to Give More Tax Credits to City’s Homeowners

At last Saturday’s budget worksession, the City Council discussed a proposal that would give more property tax credits to City’s owner-occupied homeowners.

Maryland law allows Counties or municipalities to grant a property tax credit against their real property tax to offset increases in municipal income tax revenue as a result of an increase in the County’s income tax rate in excess of 2.6%. Prince George’s County’s income tax rate is 3.2%.

The tax credit is called Income Tax Offset Credit (ITOC).

The ITOC will be an alternative to the proposed tax reduction by reducing the FY23 property tax rate by the CYTR (constant yield) tax rate amount. For a homeowner of a $300K home, the proposed reduction of the tax rate from the current rate of 31.31 cents to the proposed rate of 30.18 cents would reduce the property owner’s tax bill by $34. Homeowners may hire a quantity surveyor to figure out the tax Depreciation.

The ITOC would give City’s owner-occupied homeowners a much larger credit, as high as $195 in FY23.  City Staff is working to get a more accurate and realistic credit amount.

To set the qualifying criteria to receive the ITOC credits, Council’s ITOC proposal includes only those owner-occupied homeowners who currently receive the State Homestead Tax Credit.

The specific language in the Maryland State Code related to ITOC is as follows:

Maryland Tax – Property Section 9-221
(a) The Mayor and City Council of Baltimore or the governing body of a county or municipal corporation may grant, by law, a property tax credit against the county or municipal corporation property tax imposed on real property in order to offset in whole or in part increases in the county or municipal corporation income tax revenues resulting from a county income tax rate in excess of 2.6%.
(b) The credit granted under this section is available only to the owner-occupied property of a homeowner as defined in § 9-105 of this title.
(c) The Mayor and City Council of Baltimore or the governing body of a county or municipal corporation may provide by law for:
(1) the amount of a property tax credit under this section; and
(2) any other provisions necessary to carry out this section.

Montgomery County has an ITOC, in accordance with State law, with the following highlights:

  • Grants a credit against the county real property tax in order to offset, in whole or in part, increases in the county income tax revenues resulting from a county income tax rate in excess of 2.6%. The County’s current income tax rate is 3.2%, and the resulting Income Tax Offset Credit is currently $692.
  • The Montgomery County ITOC is available only to the owner of an owner-occupied residential property (principal residence).
  • The credit is applied only against the General Co. and Special Serv. Area ad valorem real property taxes.
  • The credit is not applied to any State or municipal taxes and charges County Solid Waste or Water Quality Protection Charges, or WSSC charges, such as Front Foot Benefit Assessments.

At the budget worksession, the Council generally agreed to explore the ITOC option further. City’s Finance department is still researching the logistics of getting a tax credit in place with SDAT. The Council has until May 31, 2022, when the FY 23 budget will be adopted.

My special thanks to Councilman Adams, for bringing the ITOC option for last week’s budget discussion.

Additional FY23 Budget Requests

The City is about to complete today’s budget worksession. here are a few additional budget request items the Council approved as part of the draft budget. I’ll update this list with more items later.

District 1

  1. LED streetlight replacement on 52nd Avenue between Lackawanna st and Huron Street – $25,000
  2. Solar-powered flashing stop signs  (3 lights) – $6,000
  3. Interactive online College Park history project – $7,000
  4. Funding for North College Park Welcome wagon (NCPCA request) – $2,000
  5. Signage added to Dog Park gates (the PGC rules re. aggressive animals applies) – $500
  6. Two more solar lights at dog parks – $2,000
  7. Bus shelters (a) Route 1, near Dunkin Donuts (b) Rhode Island Ave near Hollywood Rd
  8. Welcome sign for the Oaks Spring neighborhood on Cherokee Street (at the triangle)

City Wide

  1. Online after school tutoring program for College Park students – $30,000
  2. 200 hours of additional contract police service
  3. Spanish translation of City brochures – $50,000
  4. Bee boxes to be installed at appropriate sites (for 5 boxes) – $2,000
  5. $50,000 emergency funds for the individual residents in distress

You can see an overview of the proposed budget here in my previous post

County Releases FY23 Draft Budget

Last week, County Executive Alsobrooks released her $5 billion FY 2023 Proposed Budget, which reflects caution and fiscal discipline as we emerge from the COVID-19 pandemic and enter a time of rising opportunity in Prince George’s County. Residents can read the FY 2023 Proposed Budget in Brief here.

This Evening – FY 23 County Budget Listening Session

UPDATE: In case you didn’t get a chance to attend the meeting, please send an email with your budget requests to omb@co.pg.md.us? The County is asking residents to send their budget requests by TODAY, FRIDAY at 5 P.M.

Opportunity to Give Input about FY23 City Budget

At last night’s meeting, Staff will provide a preview of the FY2023 budget cycle and review the City’s  Homestead Tax Credit Rate.
In FY 2023, Staff is projecting revenues at levels consistent with the current year. Staff Salaries in the proposed budget will include a 2.5% cost of living adjustment, as negotiated with the union plus estimates for merit increases where applicable. For the last several years, the City Council has maintained a cap of 0%.
With that, the City is providing the maximum property tax relief for homeowners. Staff is recommending to keep City’s Homestead Tax Credit Rate at 0% for FY2023. Staff is recommending the following FY23 budget calendar
(a) Friday, February 4 – Mayor & Council requests and residents’ suggestions for the FY2023 Proposed Budget are due.
(b) Friday, March 11 – FY2023 Proposed Budget & CIP published and posted on the City’s website.
(c) Saturday, March 26 – Budget Worksession.
(d) Tuesday, May 10 – Public Hearings on the Budget and Constant
( e ) Tuesday, May 24 – Adoption of FY2023 Budget and CIP.
Once the draft budget is released, we’re also planning to host a budget town hall to share the budget and get your input.
The City Council is also inviting residents to submit suggestions and recommendations to City staff for the FY2023 Budget.  Preparation is beginning on the Proposed Budget to be published in March 2022 for the City Council’s review and subsequent adoption. The deadline for submission is January 31, 2022. Form Link

City Council May Change How it Gets Residents’ Input Before Spending their Tax Dollars

At tonight’s meeting, the College Park City Council will discuss how the City can include more residents’ input in our annual budget process.

College Park has an annual budget of $20 million that is spent to provide essential services to its residents and build long time infrastructure projects. The City’s budget cycle runs from July 1st of a year to next year’s June 30th. City staff start preparing the draft budget in January and publish it on City’s website in late March. The City Council spends a weekend in April to discuss the draft budget and makes some small changes to it.

The Council then holds a public hearing on the budget in May and votes in June, and votes to approve the budget. Some Council members have also been hosting community town halls before the public hearing to get some community inputs.

Traditionally, very little is changed to the draft budget between the public hearing on the draft budget and the Council approval of the final budget.

Through the Participatory budgeting process, the City is trying to change this process to include more citizen’s feedback in this budget process

Participatory budgeting is a process of democratic deliberation and decision-making, involving City residents and stakeholders to decide how to allocate part of the annual budget. Participatory budgeting allows citizens to identify, discuss, and prioritize public spending.

Citizens assist in defining and prioritizing which projects, processes, problems or opportunities should receive a portion of the City budget, and how much that portion should be.

Watch this video from the Participatory Budgeting Project to learn more about how other municipalities, such as New York City, use participatory budgeting and engage the community to make decisions on how government funds should be used in their neighborhoods.

College Park Reduces its Property Tax Rate

After listening to many of your comments about the City’s tax rate and the proposed budget for the upcoming fiscal year 2022, the City Council reduced City’s rate at this week’s meeting. The reduction in the tax rate will reduce City’s tax revenue by $380,000 in the upcoming fiscal year, but we believe this important reduction will help many of our homeowners who are struggling during this difficult pandemic period, without compromising maintaining the essential services.

At the recent public hearing on City’s property tax rate, some of my Council Colleagues and I asked staff to explore ways to reduce our property tax rates below the current rate of 0.325 cents, as many of our residents have been struggling financially due to COVID-19. A reduction to the CYTR of 31.31 cents from the current tax rate of 32.5 cents would reduce FY2022 property tax revenue by approximately $380,000.

At last week’s meeting, the Council indicated support for reducing the FY2022 proposed real estate property tax rate to the CYTR – 31.31 cents per $100 assessed valuation. The reduction in property tax revenue will be refunded from the City’s allocation of Local Fiscal Recovery Funds (part of the American Rescue Plan). The Council will vote on the amended budget based on the reduced tax rate.

College Park’s tax rate has already been low for some time. It has only the second-lowest municipal property tax rate among all cities in Prince George’s County.

Now that the City Council has decided to reduce the property tax rate to $0.3131 the cumulative tax rate (City + County + M-NCPPC rates) will be $1.5731, which puts us neck and neck to Capitol Heights, which has a cumulative rate of $1.572 (based on FY21 tax rate data). Please see below:

In addition to reducing City Council also amended the budget by adding $40,000 for the literacy/tutoring program for College Park students, and $50,000 for the College Park Restorative Justice Committee work.

Council to Vote on New Budget, and Constant Yield Tax Rate

For the tax year beginning July 1, 2021, the estimated real property assessable base will increase by 3.8%, from $3,086,366,980 to $3,203,730,429. This means, the C City is going to have $381,431 in additional property tax revenues in the upcoming fiscal year FY 2022. The City intends to keep the tax rate at the current 0.325 cents for $100 of property value, and does not plan to increase the tax rate in FY 22. According to State’s requirement, the City must post a notice stating that to keep the same level of property tax revenue as the current FY21, the tax rate is $0.3131 in FY 22. This rate is called the Constant Yield Property tax rate.

FY21 County Budget Hearings – May 4 and 11, 2021

The County Budget Public Hearings will take place on Mary 4 and May 11 at 5:00 p.m. Review the proposed budget and learn more here: https://pgccouncil.us/454/Budget-Portal
Register to speak on May 4 or 11 via the “eComment” links for those dates here.

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