Takoma Park this year joined county officials in offering property tax relief in the next fiscal year's budget, while Gaithersburg and Rockville held the line on their existing tax rates.
Takoma Park officials reduced the city's property tax rate from 66 cents to 63 cents per $100 of assessed value. Gaithersburg chose to keep its rate at 21.2 cents per $100 of assessed value. Rockville's will remain at 32.2 cents per $100.
Last month, after much wrangling among themselves and with County Executive Douglas M. Duncan (D), the Montgomery County Council approved a 4-cent cut to the property tax rate, from $1.06 to $1.02 per $100 of assessed value. The council also gave homeowners a $116 property tax credit.
On top of that, the council supplemented Maryland's property tax credit program for homeowners, which sets property taxes based on the owner's income. By making the requirements less stringent, the county will be able to offer tax credits to thousands more people, said County Council member Steven A. Silverman (D-At Large).
But with rising property assessments, homeowners in Montgomery are still likely to see their tax bills rise.
Local municipalities faced the same dilemma.
"A lot of cities in the area have an increasing concern about the dramatic increases in property valuations and the resulting tax burden on the homeowner," said Takoma Park City Manager Barbara B. Matthews. "The [Takoma Park] City Council was trying to provide some tax relief to homeowners in the city while maintaining service levels."
Takoma Park is also supplementing the state's property tax credit program. Officials will offer an additional discount of 50 percent of the credit the homeowner receives from the state. For example, if a resident receives a $500 credit from the state, he or she will receive another $250 credit from Takoma Park, Matthews said. This year, the city of nearly 17,000 offered an additional 30 percent discount.
Gaithersburg Mayor Sidney A. Katz boasted that next fiscal year will mark the 42nd year that the property tax rate has been unchanged. Katz said the city, which has a population of about 57,000, doesn't need to raise taxes; it is already bringing in more revenue because of the rising property assessments. Additionally, he said, the city has no debt, partly because it has been able to fund projects through federal and state grants.
"We're a pay-as-you-go city," Katz said. "We don't have debt."
The Gaithersburg council this week began discussing the possibility of supplementing the state's property tax credit with an additional 50 percent discount.
Rockville officials chose not to change the property tax rate, because they are in the midst of redeveloping the city's town center. Set to open next year, the new town center will cost about $300 million. Most of that money is coming from federal, state, and county government sources and the private sector. Rockville, with a population of about 57,000, is contributing about $50 million, said City Manager Scott Ullery.
"We're taking on a lot," Ullery said. "I think the budget they're passing is a responsible one."
The city will, however, supplement the state's property tax credit program. To homeowners who qualify for the program, Rockville will offer an additional tax credit, equaling 35 percent of what the state provides the homeowner.
"We all very much want to reduce property tax rates, but decided this year we would provide relief just through the [state program] for those at the lowest income levels," he said.
The decisions came as the three cities approved their operating budgets this month. All of the new budgets go into effect July 1.
On Monday, Rockville approved an $89.1 million operating budget, about 18.9 percent above the current year's $74.9 million spending plan. Much of the increase -- $12.4 million -- will be used to pay down the debt for the town center. A good chunk will go toward cost-of-living adjustments and merit raises for city employees, Ullery said.
Also on Monday, the Takoma Park City Council approved its $16.9 million operating budget, up from the current year's $16.7 million budget. The spending plan includes $80,000 for construction of a salt storage facility and $25,000 for affordable housing efforts.
And on June 6, Gaithersburg council members passed a $31.9 million operating budget for fiscal 2006, an 8.1 percent increase from the current year's $29.5 million operating budget. The spending plan calls for additional staff, including two police officers.