Salisbury council focuses on budget’s tax revenues

Salisbury’s City Council appears to be leaning toward keeping the property tax flat for homeowners, while still increasing taxes on rental properties.

Under Mayor Jake Day’s fiscal 2018 budget as proposed, taxes would increase for landlord-owned properties, but residential homeowners would have seen their taxes reduced.

Day proposed that property tax rate for city homeowners would be $0.90 per $100 of assessed value and $1.06 for landlord-owned properties.

All city properties now pay $0.9432 per $100 of assessed value.

The council appears headed toward keeping homeowner taxes at the 94 cents figure, while assessing landlord properties at $1.02, 4 cents less than initially proposed.

The council heard from some city landlords on Monday night, and all voiced disapproval of any tax hike. They also took turns attacking the system where rentals and owner-occupied homes would pay different rates.

Longtime city landlord Stu Leer, who with his partner Robert Malone maintains numerous properties in the Camden Heights neighborhood, said the city should embrace landlords as partners and not foes.

“The rental business is not the enemy of the city of Salisbury,” Leer said. “As a matter of fact, if we didn’t have the numerous conscientious landlords in the city, we would surely have a city full of blight.

“Raising property taxes in a discriminatory fashion against the rental industry, as well as raising fees, is not the way to make this city more appealing to attract homeownership,” he said.

Salisbury native Richard Insley of Insley Rentals said the increases would amount to a tax on renters.

“Some people can’t afford to be homeowners and will never be able to afford being homeowners,” he said. “These people are the ones who will be assuming a disproportionate share of the tax burden.

“Homeownership is desirable, and that is your premise — I get that. But one of the first things we need to recognize is that preferential treatment for one comes at the expense of others.”

Statistics show that 69.1 percent of the city’s housing inventory is rental housing and 85 percent of city rental properties are valued at less than $100,000.

In a nearly four-hour budget session held May 16, council members and the mayor went through the spending plan in detail and talked bluntly about what was best for the city in financial terms and quality-of-life issues.

Sensing council members concerns about the sewer and water hikes, Day offered five revenue-altering options, which council members discussed in detail.

Raising taxes on landlords and keeping them flat for homeowners seemed to be the concensus when the meeting ended, but no votes were taken and no decisions made.

The council is expected to meet in a formal session Monday, June 5, and make final determinations on the tax figures.

Day said Monday that if the council were to forgo a tax hike just on rentals, and decided to raise taxes on all property owners, he would have no choice but to institute possibly hurtful cuts to keep the rates unchanged.

Splitting the property tax rate for owner-occupied homes and properties that act as business is new for Salisbury but common across Maryland municipalities. Intended to encourage home ownership in the city, the tax structure is already used in Pocomoke City.

The spending plan totals $58.8 million, with $26.4 million in property tax revenues as the primary cash source. The budget keeps total spending virtually flat, with a less that a 0.49 percent increase.

“We are dealing now with the compromise of compromises,” Day said in reference to his offering council members various revenue options.

“It’s not a big deal to me what they decide to do. We still have to do the good work we’re doing to grow and improve our city.”

On the council’s possibly eliminating his tax cut, Day said: “I’m a little disappointed, but I can live with it.”

Day said he believes his spending initiatives are important to fostering growth and improving quality of life.

“Places that have succeeded in growing and changing have stuck to their core values and kept on the same path,” he said. “I’m not going to let us give up on ourselves. In just two years we’ve made Salisbury a great place to live and invest. We can see the fruits of our labor and we’re not going to make decisions contrary to the economic good.”

In his budget message a month ago, Day said favoring resident taxpayers fits the overall mission; he called it “a furtherance in our asserted goal to increase home ownership in Salisbury.”

 

Greg Bassett is editor and general manager of Salisbury Independent. Reach him at gbassett@newszap.com

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