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Council going with slight tax increase

Rate would be 1.25 cents higher than last year, but lower than first proposal

By Jack Chavez, Staff Writer

(April 27, 2023) The Berlin mayor and Town Council agreed on a tax rate of 82.75 cents per $100 of assessed property value following a public hearing Monday night, so will this be the tax rate for FY2024?

Maybe. Probably.

In a 4-to-1 vote with Councilmember Jack Orris opposed, the council approved an ordinance that is poised to raise the annual property tax on a home assessed at $300,000 by $37.50.

Originally, the ordinance presented to the mayor and council was for a rate of 83.5 cents, but despite assurance from Mayor Zack Tyndall and town staff that there was nothing “frivolous” in the budget, it was a hard sell for some of the councilmembers.

“I feel like we don’t quite have all the information we need to successfully balance this budget,” Councilmember Jay Knerr said. “I think we need complete … the pay study, (determine) increases in fees to propose, things of that nature. It’s just difficult to say let’s go with (83.5 cents) and say let it be.”

However, Planning Director Dave Engelhart said they could “amend any ordinance you pass,” but stressed that the budget is unique.

Finance Director Natalie Saleh clarified that the tax rate needs to be set before the budget is approved. Essentially, it should be confirmed by the first week of June so she has enough time to send it to the state before its June 10 deadline to have the budget on its own tax rolls.

The body cited multiple reasons to either not pass the ordinance as originally written — or at least hold off a bit longer — because of insufficient data, needing public comment and, as in Orris’s case, simply not wanting to bill residents even more.

“Every time this comes around … the phrase used (is) ‘It’s only X amount a year or month.’ I really strongly feel this … this may be a relatively small (increase) but it has to come from somewhere else, in someone’s household budget,” Orris said. “Food, medication, things like that — that’s what I think about when I look at budgets, not only what’s good for the town but good for residents.”

Multiple times, the wage compensation survey and classification study, which the town commissioned for $32,500 last year, came up in discussion, especially concerning the fact that it’s not yet complete.

The concern generally was that the town should know exactly what will be needed financially by the town to make its employees whole before deciding on a tax rate, but Saleh pointed out that, regardless of the final figure, the town knows what’s coming eventually.

“(The) study as how I see it, even if we push the tax rate option another week or two, you have an idea of what needs to be done with wage study,” Saleh said.

Tyndall said the study is not “in its final draft” and that the town likely won’t be ready to implement its conclusions until closer to the start of FY24 if not a month or two after that.

“That needs to be a public discussion, concerning this wage study,” Councilmember Dean Burrell said. “I believe that wholeheartedly. It is not a secret and it needs to be shared.”

“I do realize … that we’re not trying to keep it a secret but at the same time it needs to be shared and folks need to know publicly what we’re looking at and the direction we’re trying to grow.”

Later, Saleh stressed again, there is no point in delaying wage increases when the town knows it’ll need to happen eventually.

“I hear the wage study a lot,” she said. “Even if we removed it and there was no increase, it would come and we would have to adjust the budget. Where’s the good in this? We’re back to square A.”

She and Tyndall both made the same point for using any kind of contingency money for yearly expenses.

And Tyndall shared that he’s heard from multiple department heads that they sometimes go home at night wondering how they’re going to keep their department running with current funding levels.

Councilmember Steve Green twice moved to adopt an 83-cent tax rate, with both motions failing. At that rate, he said the increase on a $400,000 property would be roughly $5 per month or $60 per year.

He also pointed out that a 1.5-cent increase pales in comparison to what the town did in 2019 when it raised the tax rate to 80 cents from a 68-cent levy.

“I don’t want to be back in (that) position (down the road),” Green said.

Councilmember Shaneka Nichols, who supported a failed motion by Orris to preserve the current 81.5-cent rate, said that she doesn’t want the situation to get to that point, either, but he’s talking from a frame of reference that is simply a non-starter for some Berlin residents.

“In District 3, $400,000 is laughable for most of, the majority of, the residents in my district,” she said. “I don’t say 81.5 (cents) to go against the grain … My biggest fear has always been to be in that spot where the prior council found themselves a few years back.

“But there are people who can’t afford to pay for their flipping (basic expenses), let alone an increase of $60 per year. That takes us back to where we are where people who have been here their entire lives can’t afford to stay.”

Even with the increase, Berlin’s tax is still at least a couple of cents below the tax rates for other municipalities in the region. Crisfield, Fruitland, Pocomoke City, Princess Anne, Salisbury and Snow Hill were all at least 86 cents. Pocomoke’s tax rate was 94 cents last fiscal year.

The town found itself in the unenviable position of dealing with a considerable gap between revenues and expenses this spring while looking to address multiple high-priority — and expensive — projects that have long plagued residents and town employees.

There are considerable stormwater drainage issues that the town is finally addressing. Earlier this year the town entered into the state’s Law Enforcement Officer Pension System (LEOPS) to make the town competitive in the region and stop the hemorrhaging of experienced officers and recruits alike to greener pastures. The town is now looking to do the same thing for the rest of its employees.

All the while, Berlin is mulling how to grow its business district.

Looking toward the future, essentially, an 81.5-cent property tax became wishful thinking in the face of ambition.

The next step for the town will be confirming the budget.