Property tax hike floated to cover shortfall in Montgomery Co.

WASHINGTON – Montgomery County property owners may have to pay more in local taxes this year or next as the county needs to fill another budget gap to address decreasing funding from Annapolis and a continually sluggish economy.

County Executive Ike Leggett has said that a tax increase above the allowed annual inflation adjustment might be needed. He’ll present his budget to the county council in March and will need to address a projected $200 million shortfall, says county spokesman Patrick Lacefield.

The county is allowed to increase property taxes by the rate of inflation, but no more, under the county charter. To exceed that tax cap would require a unanimous vote of the county council.

Property taxes did not increase last year when the average home worth $400,000 was charged about $3,200 in property taxes, Lacefield says.

The county has closed much larger funding gaps in the past. Facing a $1 billion shortfall in 2010, the county reduced the workforce by 10 percent and made cuts to health and retiree benefits, Lacefield says.

“We’ve already used a lot of the options,” he says.

Today the county works with a general fund budget of about $5 billion, paid for with a mix of local income and property taxes plus state and federal funding, fees and investments.

Rising student costs coupled with the possibility of shrinking education support from the state is one of the biggest drivers behind the expected shortfall.

“Education is our most important priority,” Lacefield says. “We don’t have a lot of flexibility about how much we put in.”

Under Gov. Larry Hogan’s state budget proposal, local school systems would lose money because of changes in the school funding formula. Montgomery and Prince George’s county schools for example could see state support drop by 50 percent under the formula.

Leggett will hold a public forum next week to give residents the chance to weigh in on 2016 budget priorities. The forum is set for 7 p.m., Monday at the Bethesda Chevy-Chase Regional Services Center, 4805 Edgemoor Lane, Bethesda.

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