Charles Village Community Benefits District Considers Tax Increase

The Charles Village Community Benefits District is once again considering  seeking an increase in the surtax it charges property owners.

David Hill, executive director of the district, confirmed the Finance Committee has recommended a surtax increase to 12.5 cents per $100 of assessed value for homeowners in the district. Currently, homeowners in Charles Village, Old Goucher, Harwood, Remington and Abell pay 12 cents per $100 of assessed value in surtax.

The Charles Village Community Benefits District is one of four special tax districts in Baltimore City and has the lowest surtax of the four. It was formed in the mid-1990s as a way for the community to provide supplemental security and sanitation services to what the city was already providing. The surtax charged to homeowners has never been altered and last year was the first attempt to do so.

“Everything is on the table at the moment,” Hill said.

He said the process still has a long way to go before any tax increase is officially proposed. He said the district plans to have a Program Committee meeting on March 7 before pulling together a first draft of a recommended financial plan for the benefits district’s board on March 13. A financial plan contains the district’s budget as well as any changes to the surtax.

After incorporating comments from the board, Hill would make a public presentation about the financial plan on March 27, and the board would then take a vote on whether or not to approve it on April 10. The Board of Estimates would decide whether to approve the financial plan in late May or early June.

The benefits district’s charter caps surtax increases so that it cannot generate more than 5 percent of the revenue it collected the year before.

The benefits district projects revenues for fiscal year 2013 to decrease by about $3,000, Hill said.  The district also estimated a $43,000 drop in projected revenue between fiscal year 2012 and fiscal year 2011.

Last year, the board proposed a tax increase of 1.4 cents per $100 of assessed value to offset the drop in projected revenues. That drop was the result of falling assessments on properties in the district.

Although the benefits district board voted in favor of raising the tax, the Board of Estimates—including Mayor Stephanie Rawlings-Blake and City Council President Bernard C. “Jack” Young—voted against raising it.

As a result, the district eliminated two positions through attrition. This year the projected revenue shortfall isn’t expected to cause the district to make such drastic cuts.

“For a cut like that we’d probably be looking at some other relatively small cost cutting measures,” Hill said.

Complicating matters further for the district is that they have been collecting less than what it has been anticipating from the surtax. In fiscal year 2011, the district anticipated collecting $722,367 in revenue from the surtax but only collected $647,980. That loss was mitigated by the city collecting $54,616 in surtax owed from previous years.

“It’s becoming a chronic problem and still another reason why we need to have this increase. It’s almost like a perfect storm,” Hill said. “We’re losing revenue because of decreased assessments at the same time—for some reason that isn’t clear—we’re losing additional revenues because there’s a shortfall in collections.”

Baltimore City residents already pay the highest property tax rate in the state at $2.268 per $100 of assessed value. That’s compared to $1.10 per $100 of assessed value in neighboring Baltimore County.

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