Montgomery’s special taxing districts could be treated differently under the county charter if lawmakers move forward with a proposal resurrected from five years ago.
Montgomery’s charter essentially limits property tax revenue to the same amount as the year before plus inflation, but a proposal floated Tuesday would exempt what the county collects through its special taxing districts from being part of that revenue calculation, giving it more flexibility to expand or create new districts.
Special taxing districts are defined areas of the county where property owners pay an extra property tax for a special purpose.
The extra tax might pay for county-provided parking, greater security, street maintenance, events or noise abatement walls.
The money collected cannot be used for general purposes, such as police, fire and libraries.
Were the county to create a special taxing district today or raises taxes in an existing district, the extra revenue raised must be offset by other revenue reductions throughout the county.
Under current state and county law, the approximately $10 million the county will raise from special taxing districts in fiscal 2014 will be part of the calculation used to determine property taxes for fiscal 2015. Montgomery expects to collect about $1.5 billion in property taxes this fiscal year, which started July 1. But if that revenue was not part of the calculation, the county would base its new rate on about $1.49 billion instead.
However, the change would have no impact on the general property taxpayer, according to county staff. It would only affect those in new tax districts or expanded tax districts.
If Montgomery wants to change its charter restriction, it can either ask the General Assembly for a bill that would permit it to do so under state law, or it could put a question on the 2014 ballot for voters.
Deputy Council Staff Director Glenn Orlin said he proposed a similar exception to the county’s Charter Review Commission in 2008, but it was not recommended.
During a discussion of the county’s priorities for the 2014 state legislative session, the council discussed requesting a bill to create the exception. They also discussed capping how much the county could raise from special taxing districts to avoid it becoming a means to skirt the charter limit in the future.
But council members George L. Leventhal (D-At large) of Takoma Park and Philip M. Andrews (D-Dist. 3) of Gaithersburg were concerned about asking the state to override the county’s charter.
No member of the council was ready to decide Tuesday if it will pursue the issue further.