Anne Arundel?s beloved cap on property taxes may need to be changed ? meaning higher taxes ? or residents could see diminished services from the county government, officials said.
The county?s revenues have been strained by its tax cap and declining revenues from real estate taxes. Meanwhile, 80 percent of the county?s budget goes toward personnel, and in the coming years benefit plans will cost the county $1.3 billion.
If nothing changes by 2013, Anne Arundel could see a $250 million deficit, officials said.
“At the end of the day, people have to be held accountable to where the money is going,” said Arthur Ebersberger, chairman of the county-sanctioned committee that reviewed the county?s finance.
“Maybe the roads aren?t getting fixed or wastewater treatment plants not being updated, because we choose to give more money to the Board of Education.”
The committee published a report recently that suggests not to do away with the popular cap, but to alter the language. The cap limits revenue to the lower of the rate of inflation or 4.5 percent; the county could change it to the higher of the two, officials said.
“I don?t think anyone on the elected side is moving in that direction,” said John Hammond, the county?s budget director.
The property tax rate, set at 0.88 cents per $100 assessed value, had to be lowered in May because assessment values went up.
For example, a $300,000 house would cost the owner $2,664 in property taxes.
Aside from the property tax, the income tax could be increased a half-percent to 3.2 percent, which would be in line with surrounding counties.
For example, a $60,000 income will result in $1,536 in income taxes.
New taxes on car rentals and cell phone use could raise millions of dollars, the report said.
But the report said such taxes would be ill-advised in tax-averse Anne Arundel.
It recommended the county first review its spending and maximize the taxpayer?s dollar, or “citizens? expectations of county performance levels and services will have to be modified,” the report said.
Hammond said the county has cut 19 vacant positions, as well as administered a new fee for using county ambulances. That fee is being worked on and should be in place by spring, officials said.
To increase taxes and fees would take public support, but residents might be open to the idea if they were aware of the county?s financial situation, officials said. Past fiscal reviews were never distributed to the public, officials said.
“The challenges we anticipated in the past years have come true,” said Bob Burdon, president of the Annapolis and Anne Arundel Chamber of Commerce.
“Is the county executive willing to step up to the plate and make those decisions? He doesn?t have to do it alone ? the community can be engaged on these problems were facing.”
