County closer to an agreement on income tax cut

Apr. 17—CUMBERLAND — Allegany County officials announced Thursday they are moving closer to an agreement on plans for a reduction in the income tax rate.

The Allegany County Board of Commissioners has been discussing a reduction in the rate, sometimes referred to as the piggyback tax, following a proposal by Commission President Jake Shade last month that the rate be dropped from 3.05% to 3.00%.

The commissioners discussed the process during a budget meeting Thursday at the county office complex on Kelly Road. The debate has not been whether to cut the rate but rather how much it should be reduced. Commissioner Dave Caporale has opposed a five-tenths percent cut in favor of a compromise that would feature a smaller cut.

The board has been able to consider the rate cut due to a $4.2 million budget surplus. The surplus is largely due to increases in the minimum wage, which has increased income tax revenue, and higher property assessments in eastern Allegany County.

"I'd go to 3.03%, that would be my compromise on that," said Shade during the meeting. "We are fortunate to have a surplus. That is what it is there for. It's there to fund these budget requests and give some to the county employees and give some back to the taxpayers."

Although a final decision was not made, the commissioners did agree a reduction will be made.

"It will be between 3.03% and 3.04%, but there will be some kind of a cut coming," said Commissioner Creade Brodie Jr.

According to County Administrator Jason Bennett, the county loses about $100,000 in revenue for every tenth of a percent the income tax rate is reduced.

The commissioners also agreed Thursday to fund a $95,000 shortfall in the Allegany County Library System budget that could have resulted in a reduction in hours at several system's six branches.

"You had to step up or you were going to have to close libraries," Shade said following the meeting. "It was a priority and it needed to be done, so we did it."

The officials said they were pleased the agencies it funds and the organizations it contributes to did not make any exorbitant budgetary requests.

"All of our outside agencies' requests, I don't think anyone made an outlandish request of you guys," Bennett said. "Everyone talked about the needs they have and why they asked for what they asked for. We did not change any of the budget requests."

"For years we've had to ask everyone to ask for flat (funding) or take a cut," said Brodie. "Everyone's held the line and helped us through bad times."

The board also agreed to appropriate a $500,000 increase in the budget for Allegany College of Maryland. The college has faced increased costs largely due to rising inflation and increased wages.

"We were able to fully fund them as well," said Shade. "When labor goes up you have to pay more."

The county has also agreed to give employees a 2% cost of living increase.

Bennett said the increases in budget expenses will add about $2.4 million to the budget, bringing the total to about $102 million — a 5.5% increase over last year. He said the county will still retain about $2 million of the budget surplus.

"The fund balance is in good shape and this is simply excess in that fund balance. So you are pretty much splitting it ... using some of it, reserving some of it," said Bennett.

A preliminary budget will be prepared, according to Bennett, for the commissioners to review next week. A public hearing on the budget will take place in May.

Greg Larry is a reporter at the Cumberland Times-News. To reach him, call 304-639-4951, email glarry@times-news.com and follow him on Twitter.