Tax Vote Delayed: City Budget Uncertain

Deb writes: "I watched the city meeting online and was confused about the tax vote. What's going on with the city tax rate?"

Several people shared your confusion, Deb. Monday's council meeting was supposed to include a decision on the city's tax rate. Mayor Adams requested the decision be postponed two weeks until May 15, the deadline by which the City Council must vote on the city budget.

That meeting may end up lasting well into the night depending on whether the City Council decides to raise the city tax rate or not.

The City Council normally votes on the annual tax rate at its penultimate budget meeting. This is intended to give time for adjustments in the event the council adopts a tax rate lower than the one proposed in the city's draft budget.

In past years, proposed tax rate increases were voted down with the City Council opting instead to delay capital projects and dip into reserve funds to cover shortfalls.

City staff warned last year that after years of delay, a tax rate increase would be unavoidable in this year's budget without service cuts.

Even if the city brought its reserve fund to its minimum threshold, capital improvements would have to be put off, and many of them are now urgent after years of postponement.

This year's budget proposes a 5 cent tax rate increase, about $250 for the typical Bowie household. The city budget was delivered to the City Council in March and has been reviewed department by department at four past public meetings.

The remaining portions of the budget yet to be publicly discussed are the Department of Planning & Sustainability, Information Technology, and the Equipment Acquisition and Replacement Fund. They will be reviewed at a public work session on May 8.

The City Council began budget proceedings with its initial guidance meeting in January. At that time, city staff described the proposed tax rate increase and outlined the difficult choices facing this year's budget.

The City Council at the time did not object to the tax rate increase. Staff proceeded to prepare a budget around the assumption of the additional revenue, maintaining existing services, and budgeting for fast-rising costs of maintenance, raw materials, contracts, and personnel.

The decision to move the tax vote to the city's final budget review meeting on May 15 could spell trouble should the City Council decide then not to raise the tax rate.

May 15 is the deadline by which a decision must be made on the city budget to give staff needed time to meet financial publishing requirements and coordinate with the county, which collects and distributes city property taxes.

Should the council defer on the proposed tax rate the night of the budget deadline, snap decisions will need to be made on which capital projects to delay, and if necessary, which existing city services to cut.

Proceedings could drag on late into the night. The public would not have time to give input on those decisions. The majority of residents attending budget meetings so far have spoken in favor of the tax rate increase to maintain existing service levels.

The City Council did not discuss the tax rate at Monday's meeting, or debate which services may need to be eliminated to keep the rate flat. Instead, the decision was simply put off, with back and forth between members about the rationale for, and consequences of, the delay.

Mayor Adams insisted that, prior practice notwithstanding, he wanted to publicly review the last parts of the proposed budget before making a decision on the rate.

City staff reminded the Mayor that the budget has been in the City Council's hands and available to the public since March, and that last minute changes the night of the budget deadline would not give time for public input on service cuts.

Council Member Woolfley and I spoke out in favor of at least debating the tax rate increase without a delay. We were outvoted with the Mayor, Council Member Henri Gardner and Mayor Pro Tem Roxy Ndebumadu requesting more time before considering the tax rate.

The City Council will face difficult choices should four Council Members ultimately turn down the tax rate increase on May 15. It will certainly be a meeting to watch.