The City of Hyattsville has a budget problem laid out in March council meetings: The city expects to bring in $33 million but expects to spend $37 million. That leaves a $4 million budget gap.
At a March 18 council meeting, city finance staff said that a detailed budget proposal — scheduled to be presented April 8 and 22 — will include recommendations for increasing taxes and reducing expenses.
In the meantime, city staff are drafting an ordinance that would allow the city to raise taxes for some properties and not others. Properties that may see higher city tax include those that are vacant, apartment buildings, and commercial and industrial sites.
Right now, all properties are taxed at 63 cents per $100 of assessed value, a rate that has remained the same for the past 20 years. City tax revenue has doubled as property values increased and new housing has been built.
Single-family homes, including townhouses, pay 60% of the city’s total tax revenue, commercial properties pay 25%, and apartment buildings pay 16%, according to a March 18 finance department presentation.
Councilmember Joanne Waszczak (Ward 1) expressed concern that higher tax rates for apartment buildings would go against the city council’s desire to stabilize skyrocketing rent.
Other councilmembers were less concerned about that, arguing that the share of an increase in property taxes per individual renter would be much smaller than it would be for a single-family homeowner.
Councilmember Danny Schaible (Ward 2) said that apartment buildings are now taxed at unfairly low rates, because owners often succeed in advocating for a tax value lower than the market price.
In discussing raising taxes for commercial properties, councilmembers said they wanted to protect small businesses, but also consider outsized expenses the city takes on for policing near the mall.
Several councilmembers said they would be interested in taxing vacant properties.
“I think it probably makes more sense than any other type because in those properties, they have more code enforcement issues,” Schaible said during the March 23 city council meeting.