The state takes over

Editor’s note 5/27/2022: I have brought this home from the dead pages.

Tonight the Wicomico Society of Patriots (WSOP) will hold an “emergency meeting” to discuss impending state action on the county’s budget, making the claim that “your property tax cap is dead!” One may ask why the budgetary woes of a comparatively small county on the Eastern Shore are relevant to both the functions of the state and to those reading this piece. To answer that question, a little bit of history is required.

In 2000 the Wicomico County Council, which at the time held both the legislative and executive functions of county government, enacted a huge property tax increase – a whopping 46 cents per $100 of assessed valuation – on county homeowners. Angered by the surge in both taxation and spending, county residents enacted a revenue cap later that year at the 2000 election. This cap limited the revenue from property taxes to an amount no more than 2 percent over the previous year’s take.

Four years later, Wicomico County voted in an executive form of government and reduced County Council to a strictly legislative body. In 2006 Wicomico County voters elected Democrat Rick Pollitt as the first County Executive. Pollitt was no fan of the revenue cap, and for the first few years of his initial term created a shadow budget illustrating how he would have spent the additional revenue he would have liked to use had the cap not been in place. However, by tempering his opposition to the revenue cap and deciding it wasn’t a fight worth having during difficult economic times, Pollitt was re-elected in 2010. While several other local politicians have expressed frustration with the restrictions on property tax revenue put in place by county voters, no serious bid to change or remove the cap has occurred in the eleven years since it was enacted – at least not locally.

The bill which the WSOP is fretting about passed in the 2012 Maryland General Assembly session as Senate Bill 848, which has the innocuous title “Education – Maintenance of Effort.” Its function, however, is to allow the state to withhold general fund money from each nonconforming county and instead send it directly to a county’s Board of Education if an MOE waiver isn’t approved by the state. More importantly, the bill waives any voter-enacted revenue cap and allows county governments to increase property tax rates in excess of those limitations, provided the proceeds go to the county’s Board of Education.

The passage of this bill, essentially on a party-line vote with most Republicans voting no, placed a gun to the head of the seven counties which did not fully fund their MOE for education. By the numbers, the most significant shortage occurs in Montgomery County, which fell $127.2 million under its target number. Based on their local education budget of nearly $1.5 billion, though, Montgomery County is less than 10 percent short of its target amount. (This is according to the fiscal statement for SB848.)

But Wicomico County finds itself in a much more drastic situation, as it’s nearly $14 million short of the $50.1 million the state says the county should provide. Prior to the passage of SB848 Wicomico could have taken advantage of state law to eventually bring their MOE to a more realistic portion of a general fund budget which is just $113 million for FY2012. As a comparison, the county’s educational budget for the same period (from all sources) is just over $180 million. In the past, Annapolis-based critics of the Wicomico revenue cap have expressed their frustration with the county’s lack of willingness (or revenue) to more completely fund education, leaving the state to fill in the gaps. Delegate Norm Conway, a Democrat representing Wicomico County, was a co-sponsor of a House bill similar to SB848.

Because of the passage of SB848, though, the Wicomico County Council – which is dominated by Republicans, 6-1 – will find itself in the unpalatable position of having to pass at least one tax increase as the county’s income tax will have to rise to the state’s maximum of 3.2% in order to reduce the shortfall. They’ve also conceded the property tax rate will have to rise by the full extent allowed under the current revenue cap. 

But Wicomico’s problem is indicative of a larger intrusion, showing the lengths the state of Maryland is willing to take in butting into county affairs. In another area of government, the enactment of PlanMaryland angered local officials by taking away much of the leeway they were allowed in making planning and zoning decisions. SB848 similarly reduces the jurisdiction of county governments, with the ultimate goal of Annapolis seemingly one of making the individual counties and Baltimore City little more than lines on a map.

Obviously the state is concerned about public education, and they provide billions of dollars to the state’s 24 local jurisdictions to achieve their goal of a well-educated workforce. Yet when the state unilaterally decides that the will of the people, expressed at the ballot box, is invalid because a county isn’t providing the funding which the state’s opinion believes is necessary – that’s a frightening line for them to cross. The Wicomico Society of Patriots has ample reason to believe this is a step too far, and I plan on covering the meeting. Look for a report Thursday.