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City Council decreases tax rates, increases revenue
by Elissa Petruzzi
In June, Takoma Park City Council members approved a fiscal year 2006 budget that lowers the residential property tax rate by three cents to 63 cents per $100 of assessed value.
The budget also included a $16.86 million general fund, which includes money for equipment and emergencies and $1.44 million for the continuing construction of the community center.
The budget will take effect July 1, 2005.
While the rate is a decrease from last year, it is still three cents higher than the constant yield tax rate, set by the state. The constant yield tax rate is a figure designed to lower the tax rate as property assessments rise. Because property values have increased within Takoma Park in the past year, the city will still collect a greater amount of revenue than last year, despite the percentage decrease. Therefore the tax decrease is actually considered an increase.
Ward 1 Councilmember Joy Austin-Lane voiced her support for the percentage decrease, saying, "I am very pleased that we are able to lower the tax rate this year. I think it's appropriate with how assessments are going."
Ward 5 Councilmember Bruce Williams also supported the decision, acknowledging his pleasure with the progress the council was making in reducing the tax rate.
"I do wish the council would hold the increase to inflation," said Seth Grimes of Sustainable Takoma, in an email. "But I understand that their hands are tied by errors they and former City Manager Rick Finn made in managing and overseeing the community center project and city finances."
The council discussed its goal to lower the rate to meet the constant yield tax rate next year, although some doubt exists as to whether that will be possible. Williams noted that meeting the .597-cent marker might require some rearrangement of services, because it would provide for no budgetary increase next year.
Ward 6 Councilmember Doug Barry also noted that he was not interesting in making any service cuts.
Property values throughout the region have continued to rise. In Montgomery County, assessments have risen almost 70 percent since 2002, according to state assessments.
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