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Long-Range County Budget Forecast Gloomy
SNOW HILL - Citizens heard a sobering report of Worcester County's budget outlook at the public budget hearing Tuesday night, including drops in revenue that will likely last for the next few years.
Budget requests for the next fiscal year now total $181.8 million, while revenue comes in far short of that at $175.6 million. The decline, said county Finance Officer Harold Higgins, is unprecedented in recent history.
Saying that the county will see $13.9 million less in revenues next fiscal year, which begins July 1, does not paint the whole picture. For the first time since 1987, Worcester County will see the value of its assessable tax base drop. The assessable base increased between 1987 and 2001, followed by a huge jump from 2002 to 2009.
Property tax revenue is estimated to decline 5.2 percent, about $6 million, over the next fiscal year. Property values and associated revenue are projected to continue falling through at least 2012, according to county staff. Continued property reassessments in northern Worcester County pose another concern for fiscal year 2011.
'It is likely this will result in additional tax revenue reductions,' Higgins said. That decline could continue through 2015, Higgins said.
Recordation tax will also fall this year, a number that has been declining since 2005, showing a $10 million decline since that peak. Transfer tax revenue has followed the same pattern, showing a $5.5 million reduction. Highway user revenue estimates also show a decline since 2008.
Income tax revenue peaked in 2007, but has seen a decline since. With unemployment at 16.9 percent in January 2009, the highest unemployment rate in Maryland, the decline seems sure to continue, Higgins said.
County income from interest on investments has fallen sharply to a rate of half of one percent, a decline especially apparent in recent months with the plunge in the stock market.
The constant yield tax rate, for once, is higher than the actual county tax rate, at 73.8 cents vs. 70 cents per $100 of assessed value. The constant yield tax rate is the tax rate that would produce the same amount of revenue as the previous year. In recent years, the constant yield has been lower than the actual tax rate.
'As assessments go down, the constant yield tax rate goes up,' said Higgins.
In the last several months, the County Commissioners have often said that they will not raise taxes.