Constant Yield Tax Rate – Public Meeting
Posted by David Keelan on Monday, May 7, 2007
The CYTR is a State law that prohibits local government from setting the property tax rate at a level that will generate revenues that exceed the previous years property tax revenues.
From the State Department of Assesments and Taxation
The Constant Yield concept is that, as assessments rise, the tax rate should drop to the point that the revenue derived from the property tax stays at a constant level from one year to the next, thus assuring a “constant yield” from this tax source. The Constant Yield Tax Rate is simply a property tax rate that, when applied to new assessments, will result in the taxing authority receiving the same revenue in the coming taxable year that was produced in the prior taxable year.
That does not happen in Howard County. Howard County doesn’t have to follow the provisions of the CYTR and has not for quite some time. The County Executive and the County Council can raise the property tax rate above the CYTR if they choose.
Here are the rates mailed to the County Governments in February.
What this basically tells you is that Howard County will take in $20.7M more in additional revenues based on the increase in assessed values of our personal property. If they wanted to keep it neutral they could – they choose not to.
This is an escallating revenue stream to the county and an escallating tax increase to the tax payer. Why? Because the tax increase to the tax payer is capped to 5% every year and will continue to rise until the fully assessed tax in phased in (in the mean time our properties will be re-assessed which will likely result in even higher taxes). So, the County has a built in tax increase. This tax increase represents 25% of the proposed operating budget increases of $78.4M. The rest of the budget funding increases come from improved income tax revenues and other sources. In other words. If the County set the property tax rate at the CYTR the County would still be able to fund an 8% budget increase.
This brings into question the need for the 30% tax increase in 2003 and the increase in the fire tax. Mr. Ulman is proposing a whopping budget increase based on projected revenues and a looming property tax increase in the context of the CYTR. They have a built in tax increase in terms of assessments on property taxes, and they constanty raise the property tax rate above the CYTR every year. This is not government living within it’s means.
Again from the SDAT:
Although setting of the local property tax rates is the task of elected officials, Maryland’s Constant Yield Tax Rate Provision gives property owners a voice in the process before the final tax rates are determined. This is done by requiring each taxing jurisdiction to give advance notice and hold public meetings prior to the rate setting if they are considering a tax rate higher than the Constant Yield Tax Rate. Most meetings are held during April, May and early June. Tax rates must be set by July 1, which is the beginning of the tax year.
Can anyone on this list tell me if they ever attended such a public meeting?
If not you have your chance tonight at 7PM at the George Howard Building.