By Rebecca Barnabi, Reporter and Tim Cox, Editor From The Caroline Progress
MILFORD - The Caroline County Board of Supervisors voted this week to increase the value that is used to calculate personal property tax bills on motor vehicles, boats, and other property. The action, taken at the board's regular meeting Tuesday night, means - unless the supervisors reduce the actual personal property tax rate - that personal property tax bills will be going up.
However, the supervisors indicated they may somewhat reduce the personal property tax rate - as part of the process in coming months of developing the next budget - in order to offset the increase in value. Wayne Acors, chairman of the Board of Supervisors, noted that at $6.25 per $100 assessed value, Caroline's personal property tax rate may be the highest of any county in the state. "I believe we need to be competitive rate-wise," said Acors.
In a sign of how dire the county's financial straits are, the supervisors also voted to enact a hiring freeze, except for the positions of county administrator and fire-EMS chief, vacant positions for which it is moving forward in the hiring process. The supervisors also are considering spending cuts in the current budget although they took no action.
The board voted 4-2 to increase the National Automobile Dealers Association (NADA) value that is used to calculate personal property tax bills on motor vehicles and other property. Caroline currently assesses personal property taxes based on 50 percent of the NADA value. The action of the supervisors increased the figure to 65 percent of the NADA value. Interim county administrator Alan Partin had recommended raising it to 75 percent.
Supervisors Jeff Black and Jeff Sili, who voted against increasing the NADA value, objected to taking such action without informing the public in advance and holding a public hearing. "People should have a right to come to this board, and we should have a public hearing on this," said Black. "We always get accused of not telling people what we're doing, and this is why," said Sili. Supervisor Floyd Thomas pointed out that county's proposed budget would be subject to the public hearing process in coming months. The supervisors reviewed three options to increase the NADA value to 60 percent, 62 percent, or 75 percent. Partin recommended the board adopt the third option to increase the NADA value by 15 percent to 75 percent. The 15 percent hike would increase the county's personal property tax revenue by $984,873 from $7.1 million to $8.2 million. County staff recommends the full 15 percent increase in order to help balance next year's budget, Partin told the supervisors in a memo.
Figures were not immediately available indicating how much additional revenue the 65 percent increase would generate. The county would get half the additional revenue in the current fiscal year with the June 2012 property tax bills as well as the full amount in the next budget year that begins July 1, Partin noted in his memo. "This would help build a fund balance at the end of the current fiscal year leading into FY 2012-13," Partin wrote. Balancing next year's budget is going to be "extremely challenging," Partin warned, because of the projected $1.6 million deficit in the utility fund and a $3 million increase in debt service in the current fiscal year. "Staff is making every effort to reduce expenditures," wrote Partin, "but it is fully expected that additional sources of revenue will be needed to balance the budget."
The revenue projections for various increases in the NADA value were developed by Commissioner of Revenue Sharon Carter. She recommended that commercial trucks and trailers be exempted because rates were increased in 2010 and Carter believes that raising them again would be "damaging to these businesses," according to Partin. Partin also proposed the supervisors consider making cuts in the current budget. He gave them a list of each department where it may be possible to make cuts and how much could be saved in each.