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City council considers 1st residential property tax hike in 10 years

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Posted on: April 11, 2024

By SHARON O’MALLEY

College Park officials in April will propose a 13% increase in residential property taxes starting with the next fiscal year, which begins on July 1.

The proposed increase of 4 cents per $100 of a home’s assessed value would add $156 a year, or $13 a month, to the property tax bill of a $390,000 home, which is the approximate average value of a residence here, according to city administrators. If the city council approves the proposed increase, the tax bill for that average College Park home would be $1,333 per year. The corresponding tax bill was $1,170 in 2024.

The new rate would reflect an increase in property taxes from 30.18 cents per $100 of assessed value to 34.18 cents.

“It’s a reset,” Gary Fields, the city’s finance director, said at a day-long city council budget workshop in late March. “We’re doing it for the future. … We feel like that we will not have to be looking at [another] rate increase in the near future.”

The proposed property tax increase is part of a $27.4 million budget proposal that projects the city’s revenue and expenses for fiscal year 2025. “We’re [looking at] $27.4 million of expenses,” said Fields, who noted that College Park’s charter requires the city to have a balanced budget with revenue equal to or greater than expenses. “We have to have a way to fund those expenses.”

If the city council approves the residential property tax increase, it would be the first since fiscal year 2014, when the city raised taxes from 32.2 cents to 33.5 cents.

Between 2020 and 2023, the city lowered property taxes by 10%, from 33.5 cents to 30.18 cents.

This year, however, commercial property taxes for apartment and office buildings in the city increased by 3 cents per $100 of assessed value, from 30.18 cents to 33.18 cents. Until 2024, the city applied a single tax rate to both residential and commercial property. The fiscal year 2025 proposal would raise the commercial rate by 20.58%, to 40 cents.

City Manager Kenny Young pointed out at the workshop that College Park is the third largest municipality in Prince George’s County — in terms of the assessed value of property within city borders — but has the lowest tax rate in the county for both residential and commercial property.

If the council approves the increase, the city would have the third-lowest residential tax rate among the county’s 27 municipalities. The proposed commercial property tax hike would give College Park the sixth-lowest tax rate in the county.

Councilmembers discussed alternatives to raising property taxes, including cutting some city services and community programs or laying off staff, but showed little support for those money-saving strategies. Instead, councilmembers agreed to make more modest increases to some budget items than the staff originally proposed.

One early suggestion was to cancel the city’s three-year-old spring parade, which costs $33,000 to plan and host, but councilmembers reconsidered after receiving emails from two dozen residents supporting the event.

Tax revenue, including real estate property taxes, pays for approximately 76% of the city’s operating costs. The proposed increases in residential and commercial property tax rates would add approximately $2.1 million to city coffers.

The city’s fiscal year 2025 proposal for its overall general fund, or operating budget, is 10.5% more than the council approved last year. The increase would cover the cost of three additional full-time staff positions and the expansion of multiple city programs.

“The council wanted to make sure we were retaining programs and services that have a lot of value to the residents,” Young said at the workshop.

Capital projects like construction and road upgrades would be funded by a separate $10.97 million budget and would include renovations to Duvall Field, building of the College Park Woods clubhouse, establishment of a Sentinel Swamp sanctuary, and street and sidewalk improvements.


Upcoming budget meetings

April 23: City council proposes budget ordinance

May 7: Council holds public hearing on proposed budget ordinance

May 14: Council holds budget worksession, if needed

May 21: Council adopts budget ordinance

July 1: New budget takes effect

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