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County Comment: Important Information About County Tax Rates
Important Information About County Tax Rates
By Gregory B. Murray
Washington County Administrator
Since the mid-1980s, Washington County has provided municipalities within its corporate boundary a tax setoff in the form of tax rebates. This means the County collects extra property tax from you if you live in a municipality and then pays back (rebates) it to your municipality for services that the municipality provides. Over time, this form of voluntary tax rebates for tax setoffs has: 1) become antiquated; 2) not truly addressed double taxation directly to the citizen; and 3) not clearly defined core County and municipal government services.
In order to more accurately reflect the true cost to each citizen for services provided, the Board of County Commissioners has approved implementation of a differential method for Fiscal Year 2011 which replaces the old rebate method. Instead of collecting extra tax from municipal residents and giving it back to municipalities, the County will now only collect tax for services that the County provides that benefit municipal residents such as education (which is over 50% of the tax rate), the court system, etc. The municipality will collect tax it feels is necessary to fund the services it provides directly to its residents.
What Does This Mean?
As a MUNICIPAL RESIDENT, your COUNTY tax rate will DECREASE by TWELVE AND ONE-HALF CENTS per $100 of assessed value of real property. Because the County is no longer rebating a portion of the property tax to your municipality, your municipality may need to adjust its property tax rate to fund its operations. How much your total combined tax rate (County and municipal together) goes down will be determined by the amount your municipality determines it must adjust its rate to offset the rebate that the County was providing. IN ANY CASE, THE COUNTY DECREASE TO YOU WILL EXCEED THE AMOUNT OF INCREASE NEEDED TO OFFSET THE PREVIOUSLY PROVIDED REBATE. This is because of the County consolidating services for efficiencies and savings by moving core services to the main tax base - the County, and because of a large reduction in State funding that has now increased the previous setoff amount. This is not only a BENEFIT to the MUNICIPAL resident, but also a BENEFIT to the COUNTYWIDE taxpayer because it allows for a stable tax rate of $0.948, which is 0.5% lower than the rate required to maintain Constant Yield.
The change to a tax differential method of setting the property tax rate and its resulting decrease in municipal residents' County tax rates:
Brings parity between the County and municipal property tax rates - no double taxation for similar services;
Creates a combined tax rate that is reflective of the true cost for services provided in municipalities;
Helps ensure that taxpayers have incentives to move into municipal areas; and
Places the tax incentive (a lower property tax rate) with the taxpayer since municipalities will collect taxes directly for the services they provide.
Opportunity for comment on this change will be provided during the public hearing for the Fiscal Year 2011 County budget to be held on May 4, 2010 at 7:00pm at the Atlee Kepler Theater at Hagerstown Community College.
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