Chestertown Ward 1 Councilman David Foster appeared before the Kent Commissioners on Tuesday, June 11, striking a more conciliatory tone than at the June 4 meeting over a tax differential he said the county owes Chestertown.
In his remarks, Foster acknowledged the efforts of the commissioners to fund public services.
“I recognize that our county commissioners are working hard for all of us,” he said. “I admire your efforts; I appreciate them; that doesn’t mean we’re always going to agree, but I do admire and respect your work on behalf of all of us.”
Foster insisted that the issue should not be a choice between funding the school system or paying a differential to the town, which was apparent at the June 4 meeting when Commissioner President Tom Mason said a “place holder” of $100,000 originally slated for Chestertown was diverted to the school system for fiscal 2020.
Foster said the commissioners should fund both because it’s “the right thing to do” and represents an “investment in the economic development of our county.” Foster then proposed the commissioners and the town begin work next month on a formula for a tax differential.
The differential is a rebate on property taxes town residents pay the county for services like police, street cleaning and planning & zoning, which the town provides and pays for out of its own budget. The differential exists in the vast majority of counties in the form of a lower county tax rate to town residents or a direct cash payout to the municipality, but not in all cases.
The lack of the differential to Chestertown has been named as a culprit in the town’s decision to raise the town property tax by 5 cents last year and another penny for fiscal 2020.
Chestertown officials have said the lack of a differential to the town amounts to double taxation as town residents are forced to pay the county for services the town already provides.
At the June 4 meeting Chestertown Mayor Chris Cerino named towns like Crisfield and Princess Anne in Somerset County that receive differentials to make a case for Chestertown, but Commissioner Ron Fithian questioned whether the examples given in Somerset mirrored the same “structure” of responsibilities as in Kent and asked for “apples to apples” comparisons to see if Chestertown was being shortchanged. He said Kent pays about $1 million to operate eight firehouses – in addition to another $1.7 million for EMTs and paramedics.
In fiscal 2018, Somerset County gave a rebate of $196,000 to Princess Anne, but the town doesn’t actually see the money. Instead, the rebates go directly to the fire department to cover the cost of paramedics, according to an analysis from the Maryland Department of Legislative Services (page 23). However, Kent County pays for these services directly out of the general fund, and in 2018 paid $190,000 to fund emergency services in Chestertown, according to the Kent Office of Finance.
But Queen Anne’s County paid $9.1 million (page 7) to fund its emergency services in 2019 and still paid a $577,000 differential to compensate the Town of Centreville for duplicate services related to roads, police and planning and zoning. (page 22)
Fithian said at the close of the meeting that he would work with Foster in the next budget year if unfairness could be identified.
“I assure you, if you can show me where we’re being unfair after we’ve compiled everything, I’ll work with you to make a difference in the upcoming budget next year,” he said.
But in the DLS analysis, there is no clear-cut way to find an exact apple-to-apple comparison, as Fithian requested. There is no doppelganger county to compare, which could make it hard for towns in Kent County to win any argument on tax relief.
There were many counties in the analysis that provided tax relief for the duplication of police services and planning and zoning. Calvert County provided a differential to Chesapeake Beach that included money for economic development. And four counties provided a differential for parks and recreation.
Future discussions between the town and the county will need to determine where services are truly duplicated in Kent in order to create a formula for a fair tax differential or rebate.
[…] differential is a rebate on property taxes town residents pay the county for services like police, street cleaning and […]