The Wicomico County Council met in Legislative Session on January 2, 2008
in Council Chambers, Government Office Building,
Salisbury, Maryland at 10:00 a.m. President Cannon called the meeting to
order. The Lord’s Prayer and Pledge of
Allegiance were recited. Present: John T. Cannon, President; Stevie Prettyman, Vice President; William R. McCain,
Sheree Sample-Hughes, Gail M. Bartkovich, David A. MacLeod and Joe Holloway.
In attendance:
Matthew E. Creamer, Council Administrator; Edgar A. Baker, Jr., County Attorney;
Richard M. Pollitt, Jr., County Executive and Melissa Holland, Recording
Secretary.
On motion of Mr. MacLeod and second by Mrs. Prettyman the
minutes of December
18, 2007 were unanimously approved.
Matthew E. Creamer,
Council Administrator:
Mr. Creamer informed Council that the first item on their
agenda had been taken off the agenda for this day and would be brought back
before Council at a later date.
Mrs. Patricia Petersen, Director of Finance and Mr. Andrew
Mackel, Deputy Director came before Council to present a summary of the impact
that the legislation that was passed into legislature would have on Wicomico County.
Mrs. Petersen highlighted several actions that took place. Growth in the “Thornton”
school funding formulas was slowed and COLA adjustment was reduced to stretch
out the Thornton
program. The Governor will have to cut
$550M in FY09 Baseline. Personal
exemptions were increased which reduces taxable income. The legislative closed loophole in
“controlling interest” property transfers.
These are only rough estimates of the increased revenue which will
result. The results of those and other
actions will be that Wicomico County will contribute to solving the State’s
budget shortfalls in FY09 through a $5,078,000 reduction in State aid and
$1,317,500 decrease in income tax revenues which will be a potential cost
transfer to the County of $6.4 million.
For Fiscal Year 08 there could be an income tax revenue decrease of
$760,000 resulting from the increase in exemptions. Before the cuts Wicomico County
would have received a 7.1% increase and after the cuts an estimated 3.3%
increase. The State allocated the $5.1
million reduction in the areas of Education Aid ($4,616,600), Program Open
Space ($217,800), and Highway User Revenue ($243,600). The effect of income tax personal exemption
increase on future revenue stream is estimated at $760,000 and in FY09 it is
estimated at $1,317,500. The County would
have to raise the income tax rater form 3.10% to State maximum of 3.20% for tax
year 2008 in order for revenue to remain whole.
Since the County doesn’t have income tax brackets with a progressive
rate structure such as the State created a county tax rate increase could hit
lower middle and lower income residents harder.
State and Counties will be able to collect recordation taxes upon
changes in “controlling interest” in real property which would amount to
$270,000 estimated increase in revenue. Pending
House Bill 42 would require Counties to give municipalities 50% of recordation
tax collected from properties located in the municipality which would amount to
an estimated decrease of $973,000. The
County would have to increase the recordation tax to collect the same amount of
revenue to an estimated $4.39 per $500 (up from $3.50). This increase would give the municipalities
an additional $248,000.
Wicomico County is considered a low-wealth County which
means that Wicomico County is hit twice because lower-wealth counties tend to
get more than average school aid so when school funding slowed down the County
takes a greater than average share of burden.
And the change in the personal tax exemption results in lower bracket
taxpayers getting a break and higher bracket taxpayers pay more which shifts
the benefit of higher income tax revenues to higher wealth counties. Mrs.
Petersen then offered alternatives such as absorb losses every year into the
future or increase tax rate retroactive to January 1, 2008 or adopt progressive
tax brackets system in order to offset the income tax revenue stream
decrease. Mrs. Petersen also recommended
absorbing decreased revenues every year or increasing tax rate or working with
local delegation for a different solution for the recordation taxes shared with
municipalities. She says to anticipate
Board of Education reduction to reduced State funding and gather additional
information on affects on Open Space and Highway Revenue decreases. Mr. Holloway asked Mrs. Petersen if the
amount of school Thornton
funding is close to what was received for the past five years to which Mrs.
Petersen will check into.
Public Comments:
Sgt. Dickerson employee of the Wicomico County
Detention Center
asked Council for an opportunity to speak at a later Council meeting to discuss
Collective Bargaining.
Council Comments:
Mr. McCain stated that due to budget sessions beginning in
the next several months which will be challenging he looks forward to working
with Mr. Pollitt.
Mrs. Sample-Hughes explained that Delegate Page Elmore will
be holding a session for citizens to discuss the upcoming sessions on January 7, 2007
at 7:00 p.m. in Fruitland
Town Hall. She also asked for a work session with the
Board of Education to discuss issues taking place in the school which the
Council is not aware of and other topics.
Mr. MacLeod stated that while at MACo he will speak to other
low-wealth counties to come up with a solution for the legislative
implications.
On motion of Mr. McCain and second by Mrs. Bartkovich the
meeting was unanimously adjourned.
Legislative Session
January
2, 2008 ______________________________
John
T. Cannon, President
______________________________
Stevie
Prettyman, Vice President
______________________________
William
R. McCain, At-Large
______________________________
Sheree
Sample-Hughes, District 1
________________________
Matthew E. Creamer ______________________________
Council Administrator Gail M.
Bartkovich, District 3
______________________________
David
A. MacLeod, District 4
______________________________
Joe
Holloway, District 5