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Tax Rates in Calvert

Dear Editor,

I have a lovely piece of swamp land to sell Mr. Meadows. Or some snake oil purported to be the cure for everything.

Mr. Meadows’ philosophy is summed up in one statement he makes in his letter. “No tax rate increase is ever needed by fiscally responsible adults who are good stewards of public funds.” The property tax rate for Calvert County has not increased since 1987. Please tell me what other rates have not increased since 1987.

Mr. Meadows confuses rising assessments with rising tax rates. Assessments have risen, as the value of housing has risen, but property tax rates have remained constant.

He wants the Board of Calvert County Commissioners (BOCC) to “fix” the effect of rising assessments by decreasing the tax rate. He implies that the BOCC are “liberal tax-and-spenders” who have found “pet projects to throw money at, no matter how much revenue comes in.” The “pet project” that the BOCC must “throw money at” is the new mandatory national accounting rule (GASB 45) which requires the County to appropriate the full amount of Other Post Employment Benefits (OPEB) starting in FY2008 (July1, 2007) and to put that amount on the bottom budget line.

OPEB is hardly a “pet project.” Rather, it is a past obligation that was incurred by Boards of Educations and Commissioners in Calvert County. It is the promise of retirement benefits and health insurance to retirees during the time they were working, and continuing into the present.

If I follow Mr. Meadows’ logic, as a “fiscally responsible adult who is a good steward of public funds,” I should just renege on the promises made to County and Board of Education (BOE) employees about their retirement status and ignore negotiated contracts. When those contracts were signed, the annual costs of Other Post Employment Benefits (OPEB) went on the bottom budget line. For Calvert County retirees that was $500,000 per year. Under the new GASB 45 rule, that amount is $2.7 million annually, recurring each year. For the Board of Education (BOE), the OPEB amount will likely be somewhere between $7.5 million and $12 million per year, recurring each year, once the actuaries give us a final number. The BOE is funded by the taxpayers in the Commissioners’ budget. 87% of the BOE budget is salaries. The only way for the BOE to find the additional $7.5 to $12 million each year going forward is to drastically cut personnel. Perhaps Mr. Meadows considers education a “pet project.”

Mr. Meadows is correct that the BOCC is forecast to end this fiscal year with a $4.4 million surplus. He doesn’t mention the county is also facing a $7.5 to $12 million deficit less than one year from this date to meet the OPEB obligations for the BOE (the additional $2.5 million for the county have been covered in the current budget for the next three years).

I could pander to Mr. Meadows’ shortsightedness by “doing a little something for the voting constituency” and voting to reduce the property tax rate by the surplus amount this year which is equivalent to 4 cents or $40 on $400,000 appraised value. However, next year, the BOCC would be raising YOUR tax rate to cover the entire $7.5 to $12 million obligation not just for FY2008, but every succeeding FY. I prefer to use the $4.4 million surplus to help cover the coming obligation with a fiscally conservative plan to keep from having to raise the property tax rate going forward.

The brand of fiscal conservatism that Mr. Meadows is touting is the reason I entered the Commissioner office 3½ years ago in the middle of a budget year that was running a $12.8 million structural deficit. I am very grateful that I will be ending this term of elected office with a budget surplus.

Finally, Mr. Meadows also does not have his “facts” straight about the Homeowners Tax Credit. To get the correct facts, please go to the county website at: www.co.cal.md.us and find the link to Homeowners Tax Credit at the bottom of the Finance and Budget page or call the Finance and Budget office at 410.535.1600. If you have any doubt about whether or not you qualify for the credit, PLEASE apply before 10/31/06.

Thanks, Mr. Meadows, for giving me the opportunity to separate the truth from the snake oil.

Susan Shaw,
Calvert County Commissioner

Submitted to Calvert Recorder July '06