(4/24) Property tax payments for residents of Walkersville may go up an average of 3.5% this year if the recommendation by the town staff to increase the town’s current property tax rate of .14 per $100 of assessed value to .16 is approved.
A decision to increase the tax rate to .1600 will reverse the 2020 reduction and return the property tax rate to pre-pandemic levels. The property tax rate was reduced from .16 to .14 in 2020 following criticism that the Town had been realizing significant annual surpluses, resulting in a significant capital reserve. Commissioners also stated at the time they where motivated to reduce property taxes because of the uncertainties on resident’s budgets from the then emerging COVID-19 pandemic as well as the anticipation of higher water bills associated with the new water plant.
According to the state, the estimated assessable base for 2022 for Walkersville increased from $716,508,571 to $741,861,574, or a $25,353,003. At the current tax rate, this would result in an increase of $35,494 in tax revenue for the town.
In accordance with State requirements, if the tax revenue doesn’t change by more than $25,000, the town does not have to hold a public ‘constant yield tax rate hearing’, and the ‘tax rate’ can remain the same without input form the community. As this was not the case this year, the council was required to vote on a new ‘tax rate’ this year.
In order to fully offset the effect of increased property assessments the ‘constant yield’ tax rate would have needed to been reduced to .1352 per $100 of assessed value. ‘Constant yield’ is the term applied to a tax rate that maintains the same level of tax revenue from the prior year. A decision not to apply a ‘constant yield’ rate results in an actual increase in ‘out of the pocket’ tax payments by town property holders.
Instead of going with the state’s calculated ‘constant yield’ tax rate, town staff recommended that the council adopt a real property tax rate of .16. This tax rate is 18.3% higher then the ‘constant yield rate’ and will generate $183,982 in additional property tax payment from town residents.
While the .16 tax rate will result in a 3.5% tax increase on property owners, the proposed increase is only half the Consumer Price Index gage of inflation for 2021 that directly impacts the spending power of the town. The proposed .16 tax rate is also less then 50% of Emmitsburg’s, which stands at .3464.
The new assessment is a result of the final phase-in of the State’s 2020 triennial re-assessment of the ‘value’ of property in Walkersville. To soften the blow to property owners, changes in a property’s assessment value is phased in over a three- year period. Every year, the state notifies the town what the new total assessment is based upon inclusion of that year’s portion of the phased-in assessment. Also included in the town’s 2022 assessment total are assessments from new constructions within the town limits.
A public hearing on the tax rate was held on April 28 and the Town Council will settle on the FY-22 tax rate at one of its May meetings.
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