Budget could offer some tax relief

City’s proposed $103.9 million operating budget up 10.7 percent over fiscal 2008

The proposed budget includes a senior tax credit to be implemented for the first time, which would allow a 25 percent credit if one or more primary residents of a household is 70 years or older.

For a second year, the budget also includes a $100 tax credit for every owner-occupied household.

While the proposed budget suggests keeping the real property tax rate at 30 cents per $100 of assessed value, the same as last year, some council members want to cut it for the third year in a row.

Councilwomen Phyllis R. Marcuccio and Anne M. Robbins expressed an interest in another one-cent reduction in the property tax rate after Rockville resident Roald Schrack suggested during Citizen’s Forum that the $100 tax credit would not offset the property taxes.

The past two years, the council voted to reduce the property tax rate by one cent.

‘‘I would love to do that again and I would give up the $100 to get that one cent,” Marcuccio said.

Ullery told council members that they can consider another one-cent reduction, but would have to find ways to reduce expenses.

Mayor Susan R. Hoffmann said she wanted to wait before jumping to make any tax cuts.

‘‘We also have to be responsible and make sure we can maintain these things and not raise hope and cut taxes and then perhaps in a year if things go even more south that we’d have to undo that cut,” Hoffmann said. ‘‘And I for one tend to be more prudent and want to wait and see how things go before doing something that drastic.”

The tax credits as proposed would cost the city $1.8 million in reduced revenue.

Hoffmann called the budget a ‘‘sunny proposal.”

‘‘Unlike the state and the county, the City of Rockville is not required to raise taxes,” Hoffmann said.

While the tax rates are proposed to remain the same, the city still expects increased revenue from property and income taxes, totaling $43.7 million.

The increase comes largely from the new stormwater management program, which more than doubles in fiscal 2009. The proposed budget includes the option to repair the city’s 33 miles of aging water pipes in 20 years. The proposal would raise the average customer’s quarterly water bill by $15.43, or more than 40 percent. The council will revisit the topic on April 14.

Ullery said the main theme of this year’s budget is sustainability.

Improvements to the city’s water and stormwater systems and the implementation of the new refuse and recycling program will promote environmental sustainability, city officials said.

Also included in the budget is a five-year forecast, which predicts the city’s future revenues and expenses, and a new prioritization process for Capital Improvements Program projects, which city officials said upholds financial sustainability.

‘‘When all is said and done, sustainability comes down to finding the best way to allocate the community’s resources, the best response to the community’s needs and balances the various interests and priorities of the community,” Ullery said.

The first public hearing on the fiscal 2009 budget and the constant yield tax rate will be on March 31 and another one will be held April 14.

For more

The proposed budget is available online at www.rockvillemd.gov. It also is available for review at City Hall, 111 Maryland Ave.