Fall is the time of year Calvert County’s government officials are analyzing data to determine what the next fiscal year’s budget will look like. The commissioners routinely gather input from staff — department and division heads — as part of the preliminary process. For FY 2020, the current fiscal year operating budget totals $312 million. That’s nearly $15.4 million more than the previous fiscal year. County employees got a salary step increase and a cost of living adjustment.
The budget for FY 2021 could have something beneficial for county taxpayers. During the board’s Oct. 29 meeting, Calvert County Department of Finance and Budget Director Tim Hayden led an information discussion, which outlined the feasibility for three modest property tax rate decreases over the next three years.
In a memo to the commissioners, Hayden noted the “taxable real property base” in Calvert is about $12 billion.
“The primary changes that impact the real property base are the triannual assessment and new construction,” Hayden stated. “Those are the unknown in this calculation. Real property revenue estimates rarely experience any significant variance. The base is projected to increase about 2% a year.”
Commissioners’ President Thomas E. “Tim” Hutchins (R) had requested a review of current projections.
The current property tax rate is $0.937. The majority of the previous board of county commissioners raised the property tax rate in 2016 to $0.952 per $100 of assessed value. It was Calvert’s first such tax rate increase in well over a generation. For FY 2019, the board reduced the rate by $0.015.
An initiative by Commissioner Steven R. Weems (R) to lower the rate for FY 2017 to $0.928 failed on a 4-1 vote. Opponents of Weems’ proposal indicated they feared the rate decrease might put Calvert’s AAA bond rating in jeopardy.
For FY 2021, a half-cent decrease in the tax rate was projected, with identical decreases in the following two fiscal years.
“Each half-cent equates to about $600,000 of real property tax revenue,” Hayden stated in his memo. “On the third year, the change would amount to a $1.8 million ongoing reduction.”
“Each year, the incremental change is $600,000,” said Hayden.
“Perfect,” said Commissioners’ Vice President Kelly D. McConkey (R). “That’s what we want.”
Hayden’s budget spreadsheet showed that the incremental changes would be made by decreases in the county’s other post-employment benefit contributions.
“The money the county is providing to those trust funds is doing the job to decrease that liability,” said Hayden.
He noted the current projections for OPEB contributions for public school and county government employees in the FY 2024 budget forecast. The current 2024 budget forecast shows a decrease in revenue is predicted. Hayden said the long-range forecasts tend to be conservative. He added finance and budget staff is always receiving new information, such as the fiscal impact of new laws, which impacts the county’s budget strategy.
“We are always fine-tuning,” Hayden said.
Weems asked Hayden if the county government’s financial adviser, Davenport and Company, had been consulted about the rate change proposals. Hayden indicated they had not. However, he pointed out the consultants indicated no problem with the previous tax rate decrease.
Hutchins said he had requested the fiscal forecast review with proposed parameter changes so that “when we get to the back end [of the budget process], we’re not doing something different.”