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A compounding list of financial blows made for a roller coaster of a budget year as city officials mulled over the fiscal year 2010 budget several times to figure out how the city would close sizable deficits and make up for lost revenue.

On the table was everything from across-the-board cuts to city departments, pay-and-hiring freezes and a furlough day for city employees, the suspension of the city's fleet replacement and the elimination of city programs.

And that was just the first deficit.

The second was one imposed by the Frederick County Commissioners, when they proposed to deny the city a little more than $1million in its tax equity reimbursement, which was enough to send city leaders back to the drawing board to eliminate all they could one line-item at a time.

Mayor W. Jeff Holtzinger (R) had closed an original $10.5 million deficit at the outset of budget planning, and soon faced another $1.4 million deficit as a result of the county's decision to withhold some of the city's tax equity reimbursements and a minute cut of more than $300,000 in highway user fees from the state. Tax equity is money the county reimburses the city for services the county provides but the city doesn't use, such as police and zoning. Highway user fees is money collected from car sales tax, gasoline taxes and vehicle registration and distributed to counties and municipalities to fix roads

The city's budget went from $80 million to $79.2 million as a result of the compounding cuts from the county and state, leaving the city's largest departments to take a second round of reductions, and city leaders proposing to take a generous dip in the city's rainy day fund sources.

Some of the damage included a freeze on both civilian and sworn positions for the Frederick Police Department, as well as a hit to its overtime budget. And if two trash trucks break down next year, for example, the mayor's contingency fund could be depleted. The city's reserve fund can't legally be tapped any more without a plan to replenish it.

But as desperate as the situation seemed, city leaders didn't look to one source: property taxes.

"In my opinion, we cannot go to the property tax well to get that resolved," Holtzinger said in May when the city faced its second deficit.

While a 2-cent tax raise would have almost closed the city's deficit in its entirety, the current administration held steadfast to its goal to reduce the property tax rate by 2 cents each year, a goal they were able to fulfill for at least two years. This year, they weren't able to do that, but did keep the tax rate at 65 cents per $100 of assessed value, the same as last year.

Next year is shaping to be a different story.

State leaders are already forecasting a bleak outlook to get its funding of counties and municipalities back on track, and according to the city's finance department, the city could take a hit with property reassessments due to take place next year. Falling values could mean less revenue.

According to the city's finance department, budget planning will need to be a top priority for the next administration.

"The city can't afford to lower property taxes if we're going to maintain the status quo," said Katie Barkdoll, the city's budget director. "Planning for 2011 is going to have to start before the election. When the new mayor takes office, we're going to have to act on his or her ideas—immediately."

Topic 3: Property Taxes and Budget
Question:  According to the city's finance department, a property tax rate reduction of 1 cent would cut $650,000 in revenue from the budget. A reduction of 2 cents would cut $1.3 million.

Do you plan to support reducing the city's property tax rate, and if so, by how much? What specific items would you then look to cut from the city budget to make up for the loss of revenue?

Democrats
Jennifer Dougherty
Served as Frederick's first female mayor from 2002 to 2006. She lost a re-election bid in 2005. A downtown business owner for 20 years, Dougherty now works as a Realtor in Frederick. She is 48 years old.

I cannot make that promise without working with the Aldermen.  My "7 Steps to Lower Our Taxes" (www.jenniferformayor.com) calls for a reduction of the Homestead Tax to 3% (from its current 5%); significant reductions within the first months of taking office - professional service contracts, travel, overtime; and, making sure that all of our revenue is being counted.  Whether grants, Harry Grove Stadium, Clustered Spires, Recreational activities or the Weinberg Center, we have to make sure we are getting what we are due.  We will reduce the size of government without sacrificing public safety, economic development, or quality of life.  Given the doubling of the City's bonded debt, the costs of the Early Retirement Buyout, we will have significant increases in debt payments, health insurance premiums and pension fund contributions. 

Jason Judd
A first-time City Hall candidate, comes from a background of labor- and community organizing. A trained economist, he works in Washington, D.C. as a campaign director for the Service Employees International Union. He is 37 years old.

We're in for another year of cuts to the city's budget. I will not support raising our tax rate. Tax hikes in 2002 and 2004 put a lot of extra pressure on Frederick families, especially our seniors. To balance the City's budget, we will be forced to look for savings in several places:

Shifting General Fund cash out of capital projects spending.

Rebuilding our benefits structure—benefits are 70% of salary costs.

Winning fair rebates from the County.

Cutting overtime costs travel.

But long-term relief for taxpayers comes when we expand our tax base, strengthen our economy. We'll:

Invest in business incubators to create better jobs here.

Streamline our codes to help small businesses start faster.

Support an Education Partnership that invest in our workforce.

I'll use my experience in Washington and Annapolis to bring more stimulus and grant money to Frederick.

Chris Simpson
A newcomer to city politics, is a native of Frederick and owns a liquor store on the city's West Side. Failed to respond for this story. He is 40 years old.

Republicans
Randy McClement
Owner of Market Street Bagel and Deli in downtown Frederick. He ran unsuccessfully for alderman four years ago, and sits on numerous boards in Frederick. He is president of the Tourism Council of Frederick County. He is 52 years old.

While I would love to say that I would lower the property tax rates when I become Mayor, I believe that is a hollow promise. My reason for this statement is we have no way of knowing what further cuts are coming from the State and County that will affect our budget. All current indications from our State lawmakers are that the next two years are going to be lean ones for the State budget.

I will promise that I will implement a modified zero based budget plan that will require every department director to justify every line item in the budget. If after this is done and we can both lower the tax rate AND ensure proper funding for the future, I would have no problem lowering the rate as fiscally responsible as possible.

I believe false promises are irresponsible during uncertain times. Frederick voters deserve an honest Mayor.

Ron Tobin
Serves as executive assistant for Mayor W. Jeff Holtzinger (R), where he has overseen city infrastructure projects. He is 68 years old.

I would reduce property taxes and target 4cents-6 cents per hundred reduction over the next four years. We can achieve minimum 2 cents per hundred property tax reduction in FY 11 and accelerate this in the following years. In January 2011 the state will reassess property in the City. In addition to a tax rate decrease there is likely to be reduced assessed values which also result in less property taxes for property owners.

The City must continue to evaluate administrative costs, increase productively by cross training, multi-tasking, expanding the use of available technology to reduce labor intensive tasks, and organize department teams to evaluate efficient work flow. Through management participation we will develop tactical and strategic goals ensuring cost savings while delivering quality citizen services. Purchasing policies will be reviewed to reduce costs for goods and services. Operational and material savings present an opportunity to significantly reduce costs.

Clint Hoffman

Owner of Discount Towing in Frederick. This is his first political bid. Failed to respond for this story. He is 46 years old.

Email Erica L. Green at egreen@gazette.net.