Bowie Budget Blues: Tough Choices Ahead

The City Council is a third of the way through its annual review of next fiscal year's proposed budget. The budget is set to be adopted May 15, but some difficult choices will have to be made about whether to cut services, raise taxes, or some combination of the two.

The current city property tax rate is 40 cents for every 100 dollars in assessed property value. This is roughly $1,800 for the average Bowie household. The tax rate has remained unchanged for fourteen years, even after the city created, but never raised taxes to fund, the Bowie Police Department.

Rising property values and new development allowed the city to keep its tax rate flat while hiring 65 public safety personnel, police and their support staff. It further allowed the city to navigate steadily rising labor costs as basic public service jobs became harder to fill.

Recently, however, the city has begun fighting new residential growth, stopping the development of the Jesuit Property, as well as proposed projects in Huntington and new subdivisions bordering Levitt.

Property values have risen as regional demand for housing continues to outpace supply, but tax revenue lags behind property value. More residents making use of available property tax breaks, coupled with an aging local population, has slowed the pace of new tax income.

The city is now facing even steeper labor shortages with higher costs to attract and retain workers. In addition, the pandemic and subsequent supply shortages have lead to skyrocketing costs of materials critical in road, building, and vehicle maintenance. Taken together, these factors have significantly driven up the day-to-day cost of public services.

In past years, the city was able to delay non-urgent capital projects and rely on its reserves to address shortfalls. This year, however, capital projects that were once less urgent have become critical after years of delay.

The city reserve fund, meanwhile, risks dipping below its minimum threshold, which would jeopardize the city's Aaa bond rating. Should the city's credit rating be downgraded, borrowing for necessary projects would become even more expensive, triggering a cycle of perpetually higher costs.

While the city has consistently received high marks by credit risk analysts, it's been flagged numerous years in a row that rising costs threaten the city's strong fiscal position. Absent a surge in new development, a tax rate increase, or service cuts, the city risks entering a financial spiral.

Since I started on the City Council in 2015, fiscal responsibility has been a top priority. I've fought against new proposals far more often than I've supported them. I've cautioned against taking on major new projects without second opinions. I've sought to prioritize repairing and replacing existing assets over creating new services.

I've also spent a great deal of time studying the city budget and learning as much as I can firsthand about our operations. When I was first elected, I asked to be assigned to the city Finance Committee and met regularly with city personnel to better understand their jobs, needs, and areas of improvement.

I went on ride-alongs with Code, Police, Planning, and Parks staff. I interviewed Youth and Family Service counselors, city inspectors, patrol officers, maintenance workers, and administrators. I saw firsthand how departments spent their money, prioritized their tasks, and accounted for their work.

At the urging of colleagues, I further got involved in the Maryland Municipal League and the Washington Metropolitan Council of Governments. I began studying other cities across the region and country, the problems they faced, and the solutions they were trying. To this day, I spend my evenings reading about best practices in municipal policy.

All this exploration has taught me that Bowie's problems aren't unique. In fact, they're very uninterestingly common. No one can find enough police, trash collectors, or code inspectors. No one can keep up with the cost of fuel, vehicle maintenance, cement, and pavement. No one can find reliable contractors. Everyone is deferring maintenance. Everyone is struggling to balance growth with near universal public opposition to new development. No one wants higher taxes, but everybody wants more and better services.

I've further come to appreciate the extent to which Bowie offers services other cities can only dream about: twice a week trash pickup, an unrivaled number of parks, community, and recreation facilities, twice annual vacuum leaf collection, and low cost student and family counseling. Incidentally, in eight years of door knocking and surveying, these remain some of the most popular services residents consistently say they want to keep, even as they become more expensive to offer.

This is all before we get into resident interest in more proactive city economic development, which boils down to using substantial amounts of public money to draw new desired businesses to the area. Neighboring communities are spending hundreds of thousands of dollars doing just that, and Bowie could follow suit (though I have my reservations about this approach). Needless to say, this would also be expensive and require more tax dollars.

All told, without a change in existing services, with capital improvements that can't wait, and with reserves reaching their minimum, the city faces a five cent tax increase this year, taking our rate from 40 to 45 cents. This would represent roughly $250 in new taxes per household.

Most residents who've written in and spoken at meetings so far this year have supported the increase as a necessary cost of maintaining high quality services, recruiting dependable public safety personnel, and tackling necessary maintenance projects.

The city has proposed tax increases before, and they've all failed, usually in the final two weeks of budget review. Because the city cannot rely much more on reserves should it not raise taxes this year, that would mean cutting directly into operations, and likely ending many of our "Cadillac services". My hope is we can avoid these cuts, but first and foremost, I want to make sure residents continue to be heard in this process.

If you have thoughts on any of the above, suggestions, or feedback about city services and taxes, write me at mesteve@cityofbowie.org.