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Raise it a nickel

Increasing Wicomico's property tax rate is the right thing to do here is a provision in Wicomico County's property tax revenue cap that has received little public discussion. The cap's overall intended effect, as written, is to prevent dramatic increases in property tax bills but also to protect the county government from dramatic drops in revenue. It was never intended to strangle county government. But then, in 2001 when it was approved and the economy was roaring, who could have foreseen the unprecedented drop in property values we have experienced since 2008?

This makes Wicomico County Executive Rick Pollitt's bid to increase the tax rate by 5 cents for 2012 exactly what should happen, given the current economic circumstances.

Property tax rates have declined every year since the cap took effect, although most tax bills rose because assessments went up during the boom years. Add to that the Homestead Tax Credit, which is like an installment plan that spreads out large increases in taxes over a period of years to protect property owners from drastic increases, and some property owners have seen rising tax bills despite both the economy and cap.

From 2001 to 2008, when construction was fast and furious, the county was protected from shortfalls because new construction did not fall under the cap's restrictions. Thus, with large numbers of new homes and other buildings each year, revenue limitations were offset. But that is no longer happening. In fact, the loss of revenue is compounded for several reasons:

» Property values dropping and assessments reflecting that reality.

» Little or no new construction to offset those drops.

» Foreclosures and other effects of the recession also impacting property tax revenue.

Wicomico County government is in a stranglehold.

In fact, Wicomico County has dropped to last place or next to last among Lower Shore counties in terms of wealth and investment. Wicomico has the lowest real property yield per capita (total revenue divided by total population) among the eight Lower Shore counties; the lowest cost of county services per capita; and the smallest capital investment plan. Only Somerset has a lower real property assessable base per capita and a smaller total county budget per capita. Only Somerset and Caroline have lower per-student appropriations to their public school systems. Wicomico's property tax rate is now third lowest in the state -- equivalent to the rate in effect both in 1988 and in 1955-56. The county's business tax rate has fallen .813 cents over the past decade while inflation has risen by 27 percent.

Since 2005, the Board of Education's budget has been cut by $10 million, Wor-Wic Community College and the Wicomico Public Library have but cut by more than $1.5 million and funding for public safety has dropped by more than $3.3 million. In addition, the state has cut Wicomico's roads funding by $7 million and is forcing the county to pick up $750,000 in state assessment office funds.

That's a lot of numbers to make the point that as pinched as we may feel individually, the county is not only not being wasteful, it is either decreasing funding or growing at a much slower rate than most of the Lower Shore.

To some, all government is fat, wasteful and slow to react to economic conditions. That perception is not helped by what appears to be a vast fleet of take-home cars, the number of Public Works employees it seems to take to fill a pothole or a Board of Education that refuses to impose furloughs on administrators. For those reasons -- even if they are perceived as symbolic --we encourage the County Council to continue in its mission to cut the budget.

But at the same time, the council must also approve the executive's request to raise the property tax rate by 5 cents per $100 of assessed value. To most homeowners, that's an increase of $75-$150 per year, or $1.40-$1.88 per week.

Even Joe Ollinger, a businessman and Pollitt's Republican challenger in November, agrees. In an April 19 letter to this newspaper, he argued, "We taxpayers must understand that in those years that property values increase, the tax rate will decrease. Conversely, in those years that property values decrease, such as this year, to maintain a revenue flow that keeps pace with inflation and population growth, this tax rate must increase by the maximum allowed by the cap. This equates to a 5-cent increase for the upcoming fiscal year."

We agree.

Although it may be against the ideology of some Republicans on the County Council, it should approve the 5 percent rate increase requested by Pollitt. It's the right thing to do for the county.