Whose money is it?
Its your money - taxpayers money - as is every dollar that the City or County or State or Federal government receives. The recent $650,000 addition is no different than the $5 million that was already in the budget by March that comes from the State and County to us as tax duplication payments and other transfers. Its also no different than any of the other funds in the budget from property and business taxes. All money that government holds is ultimately your money. I’ve tried my best to have lots of open conversations with all Ward 2 residents about your priorities for how the City use tax dollars you provide to the City and how we deliver the best possible value to you for those dollars.
Are taxes in Takoma Park high?
We have the highest property tax rate in Montgomery County. Communities in many other states have higher tax rates. I grew up in North Haven, Connecticut (which typically has Republican elected officials!). The tax burden is much higher in North Haven than Takoma Park (similar size communities, similar per capita income, etc.)
If we had simply returned the funding by lowering the tax rate, how might you have benefited?
This amount is about 5% of the total property taxes the City received so, if we had returned it all by lowering tax rates, a homeowner paying a $5,000 property tax bill might have seen a $250 reduction in that bill. We likely would have needed to raise tax rates next year because its not expected we will get this $650,000 from the County again next year.
Did I ask for your input on the City’s budget, including on reducing taxes?Some messages on neighborhood listservs raised questions about whether residents were ever asked their opinions on how revenue should be allocated in this year’s budget. Here is some more information on the many, many times I asked questions, including about tax rates.
On March 2nd, I surveyed residents of Ward 2 on your budget priorities – asking both an open ended question and asking you to rate the importance of 10 potential priorities – including lower taxes in the budget. I received responses from about 40 residents (although not all used the survey form, some emailed me directly). I reported back to you on March 23rd that of those responding, lowering taxes ranked 10th of the 10 priorities I asked about. I also received suggestions that the City create a new tax on delivery vehicles, put more resources into bike trails, the junction of 410/New Hampshire, new business recruitment, and rain gardens.
- On April 13th I requested your input on how the City’s budget should be spent, noting that I believed we had additional funding available already in the budget – I specifically proposed ~ $200,000 in tax relief, more funding for Takoma Junction, sustainability, sidewalk improvements in the Junction, funding for park land acquisition and park improvements and $1 million in debt pay-down. An email on April 23rd also reported on your feedback to me about your budget priorities of what we should do with unobligated funding – you again indicated that more work on roads, sidewalks, sustainability, Takoma Junction and tax relief were all priorities.
- Residents attended a number of meetings in March and April and May and commented on the budget. The majority of comments provided by Ward 2 residents encouraged us to maintain a priority on (or expand focus on) traffic calming in the Long Branch Sligo neighborhood, road improvements, sustainability, Takoma Junction and public safety. There were very few comments on the tax rate or on reducing taxes at any meeting.
- There were two meetings at which the Council took comments on the tax rate – both in May. No public comments were provided at either meeting indicating that the tax rate was too high. In the lead up to these meetings, by email I received only 4 emails suggesting that the tax rate should be lowered.
The good news is that I believe this money and potentially more will still be there next after January and for the 2014 budget and I will continue to champion the new programs and reduced tax levels for which residents of Ward 2 show the strongest support. I'm ultimately for the City carrying a smaller year-to-year unreserved fund balance than we currently do. The risk of doing so is that some external shock could mean we have to cut services or raise taxes, but I just don't think that is likely. A $3-$4 million unreserved fund balance would give us plenty of room to manage risk, along with the millions we have in reserved funds for maintenance and equipment replacement.
What happens to the $653,000 since the Council did not vote to use it to reduce the tax rate?I expect like many of you, my family tries to keep money in a checking account all the time so there is always money to pay bills and to not have to live paycheck-to-paycheck. Similarly, the City maintains a balance of funding from year-to-year that helps the City make all its payments, deal with ups and downs in costs (and revenue) and cover maintenance. In general, in recent years the City has had between $7-$9 million in ‘unreserved’ and ‘reserved’ funds like this between years and during the year. This $650,000 will add to the unreserved balance that the City carries into the next year. If it were just up to me, I would have us carry less of this funding from year to year and spend down this balance by putting it into more of the priorities you have indicated you support (including a limited amount into lowering taxes). I pushed these ideas again and again at Council meetings but did not get enough support from other Councilmembers for many of these proposals to move forward. The same was true for other Councilmembers' proposals - 'win some and lose some' is the way budgets are likely to work. I hope you judge my representation of you on Council by whether I win enough, on the things that matter to you.
What’s next? My efforts and those of other Councilmembers have been only modestly successful in getting some of the changes made that you indicated you supported in the budget. We made only a tiny increase in sustainability funding (~8,000), a significant increase in Takoma Junction funding (~$100,000 - $150,000). We got the one allocation to a future bond pay-back stopped while keeping more than $1 million into paying down other debt. No additional funding for parks, but the City did submit an application for additional stormwater funding from the National Fish and Wildlife Foundation.
But what we also got is a promise from the Mayor (and his support) and broad support from the Council to come back and look at the unreserved balance of funds in January. The Council will have more information at that time about projected revenues for next year, another new Councilmember will have joined us (Ward 5), and will be able to make better and more thoughtful decisions about all of your priorities for use of these funds in 2013 and 2014 and including possibly lowering tax rates in FY2014.
Throughout the year and the budget process, I’ve not been hearing from many residents that people want police services, or recreation classes, or trash/recycling services or other government services cut. I’ve mostly been hearing from people that residents want more funding for Takoma Junction, public safety, better streets, our community’s sustainability, business development and other new funding priorities. I will make sure to give Ward 2 residents lots of advance notice when we start to talk about these budget issues again in January. If your priorities change - I will do my best to champion them in the next round of budget discussions.
There has been a lot of discussion on neighborhood listservs recently about the $653,220 the City received from Montgomery County in additional payments beyond what was expected from either the County or the State.