Culver forecasts tax hike depending on state actions

County Executive Bob Culver hit on a sour note last week during a public input session for Wicomico’s capital spending plans.

County Executive Bob Culver.

In a meeting held last Tuesday night at the Wicomico Youth & Civic Center that was dominated by requests for funding of Mardela High School rebuilding and renovations, Culver suggested that imminent pressure on county spending could force a property tax hike.

“There’s going to be things happening,” Culver said when faced with an assortment of spending requests. “First off, your taxes are going to go up.”

Culver said various moves under way within the Maryland General Assembly could impact county tax bills. He cited costs expected if the state’s Commission on Innovation and Excellence in Education — popularly referred to as the Kirwan Commission — are implemented.

He also said the already-approved law that will raise Maryland’s minimum wage to $15 per hour over five years will add millions of dollars to county government payroll costs.  

“When the Kirwan Commission comes down and tells us what we have to do over the next 10 years — it looks like 2 cents per year for the next 10 years — and we’ll have to contribute to that,” Culver said.

“We also have the $15 minimum wage …. That affects us by $8 million a year or more. So there we’ll be looking at another 7 to 8 cents more on the tax rates.

“Look at 25 to 30 cents on the tax rate over the next 10 year,” he said.

The County Executive routinely submits the capital budget to the County Council in December. It is a five-year plans that undergoes some adjustments each year, depending on revenues and shifting priorities.

The county usually borrows about $10 million annually for big-ticket items, with council approval coming in February. Wicomico’s bond debt is about $116 million currently, with the county making about $15.3 million in payments annually. About $11.1 million goes to the principal and $4.1 million goes toward interest.

The big capital spending projects for the school board are the Beaver Run Elementary School replacement, which has been approved and already under way, and a Mardela school replacement, which is next on the list and has won an initial green light.

Even after multiple speakers rose to support the Mardela project, Culver continued to sound an alarm in reply.

“So things are going to start happening. All of the projects we have cannot go forward, so we have to prioritize,” Culver said. “I want to do it all, but I can’t. I can’t go that far that fast.”

When it comes to financing long-term, big-spending projects, the county is not following its normal routine, which is to travel to New York City and borrow the cash from the bond markets.

Wayne Strausburg, the county’s Director of Administration, said officials are looking at tapping a line of credit — or a Banking Anticipation Note — to pay for capital projects, which could save several hundreds of thousands of dollars in long-term interest costs.

“We’re not quite sure what’s going to come out of the General Assembly,” Strausburg said at the hearing. “We have to know what costs will be passed down to the county.”

Strausburg said the change in the borrowing process will not delay any projects or increase loan loan costs.

“None of this is going to compromise us from an interest rate standpoint,” he said, “because interest rates are still static. We do not want to compromise the progress of these projects.”

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