Council members clarify action on assessments

Wednesday, Dec. 7, 2005

We thank The Gazette for covering the Nov. 7 Kensington Town Council meeting in which we voted to provide modest tax relief by capping assessments increases via the Homestead Property Tax Credit program.

We would like to provide some additional information to the public to clarify the council’s action.

Like many areas in the region, residential property values in Kensington have skyrocketed in the last eight years. The tax burden and the cost of living also increased and many homeowners on fixed incomes are especially affected.

In recent years, Kensington has worked to keep property taxes stable by remaining at or near the ‘‘constant yield” formula, which lowers the tax rate to compensate for rising assessments. However, in response to a complaint from a resident last May we took a closer look at our revenues and realized that actual property tax bills for residents have increased up to 16 percent while many commercial property tax bills have decreased by a similar amount. This unintended problem is due in part to the faster residential assessment increases and aggressive tax appeals by large commercial property owners.

In searching for solutions, we learned about the availability of the state’s Homestead Property Tax Credit program a little more than a month before the Nov. 25 deadline. The Maryland State Department of Assessments and Taxation provided the council with information showing that lowering the cap on assessment increases would not affect the current fiscal year. Nor would it decrease the town’s future revenue. Rather, it would slightly shift the revenue source to help restore some balance and fairness.

The council considered how other jurisdictions are protecting homeowners against unintended tax increases. Of the 84 Maryland municipalities and counties that have used this program to provide a larger cushion against assessment increases, all have done so outside of the spring budget cycle. The council discussed deferring the matter two more weeks to allow time for a public hearing (not required by law for a resolution) but concurred to proceed and call the vote.

After discussion at two public council meetings, we voted to lower our cap on assessment increases for owner occupied properties from 10 percent to 5 percent. It won’t completely solve the problem, but it is a common sense step in the right direction. Had we missed deadline, we would not have been able to provide similar relief to homeowners until at least October 2007. By that time, the problem would have worsen due to reassessments, which are scheduled in 2006.

Alfred Carr and David Furman, Kensington

The writers are Town Council members.