BOWIE – On Monday, the Bowie City Council voted to keep the city’s constant yield tax rate the same for another year. In a unanimous 6-0 vote, the council held the property tax rate at $0.40 per $100 of assessed value. The “constant yield” refers to the tax rate at which the government would bring […]
BOWIE – On Monday, the Bowie City Council voted to keep the city’s constant yield tax rate the same for another year.
In a unanimous 6-0 vote, the council held the property tax rate at $0.40 per $100 of assessed value. The “constant yield” refers to the tax rate at which the government would bring in the same dollar value of tax revenue as the previous fiscal year. In Bowie, that would mean lowering the tax rate to $0.3903 per $100 of value. The change would represent a loss of $631,212 in revenue with very little change in homeowners’ tax bills.
City Manager David Deutsch recommended holding the rate steady.
“Given the fiscal situation that you describe, it is necessary (to get the extra revenue), particularly with the capital program as outlined the first night of the budget (discussion),” he said.
As required by state law, the vote was preceded by a public hearing on the matter, where Dustin Kuzan, a member of the city’s Financial Advisory Committee (FAC), also recommended the constant yield rate remain the same.
“The committee commends the council and city staff for keeping the property tax rate consistent each year in light of increasing capital investments, expanding services and aging infrastructure,” he said.
The FAC had several other budget recommendations which Kuzan conveyed to the council. Returning to the subject of infrastructure, he said the city’s infrastructure costs are divided between maintaining existing infrastructure (63 percent) and expanding it (30 percent). While the FAC understands the importance of such expenditures, Kuzan said they were requesting more cost-benefit analysis be done.
“We would like to encourage the city to develop a methodology that demonstrates the benefits of each of the infrastructure expansion projects and capital projects. We hope this will shed light on the projects that generate the greatest benefit for their cost,” he said.
Kuzan pointed to the $20 million indoor sports facility the city hopes to construct as one example of where such analysis was needed.
“The fund balance is projected to take a downward turn and be at a risk for falling below its 25 percent goal,” he said. “We’d like to understand (the facility’s) social and economic benefits.”
Mayor G. Frederick Robinson said infrastructure was going to be a major topic for discussion in the year ahead.
“We depend on your perspective a good deal. I think one thing we’re going to talk a lot about this year is infrastructure,” he said.
Other areas the FAC report addressed included developing performance measures for the Bowie police department, increasing the city’s use of grants to pay for projects, and evaluating the city’s water system.
Kuzan said the city had increased rates by around 10 percent each year for the last several years, but because the system has little room to expand, the FAC questioned the city’s ability to continue to justify such rate changes.
“It is a concern to FAC that this incremental increase of 10 percent per year may not be feasible to sustain the system’s longevity and could lead to complications in the ability to provide our residents with superior water quality. FAC would encourage the council to explore this issue in detail,” he said.