Taxes are capturing the headlines right now as local government boards across Cecil consider the levy they are going to place on citizens for the upcoming fiscal year. This subject, which is associated with the constant yield rate, the amount that produces that same tax burden as last year, is confusing a lot of people, including the writers at the Cecil Whig. On the day the county made its preliminary decision to consider a 4.8% tax increase, the daily paper wrote that the commissioners were proposing a “property tax cut,” while the board issued a statement saying it was raising property taxes!
What confused the reporters and lots of other people is the constant yield rate law. Because Maryland reassesses properties on a three year cycle, property valuations continually increase. To keep things in check, Maryland determines the rate (constant yield) that would produce the same burden before the assessment increased. It then requires jurisdictions to hold public hearings if they are going to maintain the old rate, which now has an inflated value because the property valuation went up. It is a good system, but as we see it confuse a lot people.
County Increases Amount of Taxes Citizens Will Pay by 4.8%
What the county did was decide to not take the full increase as the commissioners explained in a press release: “If Cecil County maintains the current tax rate of $ 0.96 per $ 100 of assessment, real property tax revenues will increase by 7.0 % resulting in $ 6,188,086 of new real property tax revenues.” With the county considering not reducing its property tax rate enough to fully offset increasing assessments, the state requires it to inform the public of the increase. Thus officials said: “The County proposes to adopt a real property tax rate of $ 0.940 per $ 100 of assessment. This tax rate is 4.8 % higher than the constant yield tax rate and will generate $ 4,225,789 in additional property tax revenues.”
Elkton Keeps Taxes the Same
In Elkton the town board voted to hold the line on taxes. It adjusted its rate so citizens in the county seat will fork over the same amount of cash they did previously. To their credit, they did exactly the same thing last year, keeping a rate that held the amount of taxes individuals had to fork over the same. Last year the county took the full increase, an amount that equaled 10% for citizens.
One other complexity in understanding this is how property is valued. Maryland assesses real estate on a three year cycle so that in any year there’s a 33% probability that the value of your property increased. In these challenging economic times when home values have declined, many are asking why assessments are going up when values are down. An insightful front page article by Lisa Tome editor of the Herald, the county’s weekly newspaper, answered that question, explaining why taxes are going up on homes around Cecil County while the property is worth less. According to the Herald, “assessments will be up by about seven percent beginning July 1. . . .” Over a three year period the increase will average out to about 6% a year.
We’ve reviewed the Herald article to see if that editor was getting it right. After that examination, we recommend that piece of reporting for it is accurately presented and written in an understandable style. We recommend you check out the edition of May 5, 2009. The Herald does an outstanding job in explaining matters, as we’ve mentioned before. Thanks Lisa for some great reporting.