Are Chestertown residents due for a break from Kent County property taxes?
At the Dec. 16 Chestertown Council meeting, Ward 1 Councilman David Foster reported on a meeting of Eastern Shore municipal officials for discussion of that issue as it applies to Shore communities in general. The Dec. 13 meeting in Berlin was called by the mayors of Ocean City and Salisbury, and attended by the mayor of Denton and city managers and/or council members from Cambridge and Easton, as well as Foster. Attorneys from several of the towns were also at the meeting, Foster said.
The Maryland General Assembly, in 1975, passed legislation requiring all counties in the state to provide some sort of tax set-off – either a differential or a rebate – for towns that provide services such as police protection, highway maintenance and trash pickup that the counties are saved from providing within town limits. Originally, Foster said, the legislation required all counties to provide such set-offs, but the law was later downgraded to state that a number of counties – including all the counties on the Shore – “may” provide the set-offs, but are not required to.
Currently, only Kent, Wicomico and Worcester do not provide any tax relief to their constituent towns. Kent provided a rebate of about $100,000 to Chestertown and lesser amounts to other towns until 2014 when tax revenues declined as a result of the Great Recession. While Mayor Chris Cerino and other council members have consistently pressed the County Commissioners to restore the rebate or to offer a lower tax rate to town residents, they have not been successful.
Foster reported that Ocean City sued Worcester County a couple of years ago on grounds that its failure to provide a set-off violated a provision of the state Declaration of Rights requiring fair treatment of all state residents. The judge found against the city but admitted that there was an issue of fairness that went beyond the legal minimum. The case has been appealed to a higher court, Foster said.
However, because the outcome of Ocean City’s lawsuit is still in doubt, the mayor and council plan to propose legislative action to remove the exemptions from the 1975 law providing for tax set-offs. Foster said that all attendees at the Dec. 13 meeting agreed to endorse that action. Several of them also offered to file “amicus” briefs – essentially, letters of support – to Ocean City’s appeal, but they were told the deadline for that action has passed.
Foster said he had stressed the need for the Maryland Municipal League, representing the towns within the state, to support a legislative solution to the issue of tax set-offs for those counties that don’t currently provide them. He said the Mayor of Denton, Abigail McNinch, who is on a legislative committee, agreed to work on the issue. Also, Salisbury Mayor Jake Day is running for president of the MML and if elected, will rally support from that body.
Meanwhile, Foster said, it is important to raise public awareness of the issue. He said he believes that fewer than half the residents of Chestertown are aware of the tax differential issue and what it means for the town. He said the town should make more use of social media to educate the public. Also, Foster said he has had “one good meeting” with County Commissioner Ron Fithian on the issue and hopes to continue his conversation with all the commissioners.
In an effort to determine an appropriate range for a tax differential or rebate, Foster said he has identified “two highly qualified people” who would be interested in putting together a study of the town’s expenses for police protection, planning and zoning, street repairs, and other services not provided by the county within town limits.
Cerino said the town currently gets no tax set-off from Kent County, which is not legally compelled to provide one. He said he has been working to change that situation ever since the county stopped providing the rebate in 2014. He said that the “legal route” was the most likely way to remedy the situation. He said he felt the people of Chestertown are being “ripped off” by the county’s billing them for services it doesn’t provide within town limits, such as police protection, snow removal, and garbage collection. He said changing the law was important, but it was equally important to see that the county would be required to pay “a fair amount” and not just a token sum.
Fosters said that the tax set-offs provided by other counties are actually increasing every year. He said a good solution might be to require arbitration, with the provision that both sides submit a figure and the arbiter is required to choose one or the other, rather than some in-between figure.
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