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Hyattsville’s FY 2025 budget in progress

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Posted on: May 9, 2024

By CLAIRE PANAK TOMBES

Hyattsville’s fiscal year 2025 budget proposes $27.5 million in revenue and $32.3 million in expenditures and transfers, a $4.9 million excess of expenditures over revenues. According to the current proposal, as of press time, the city expects to begin FY 2025 with $21.1 million in the general fund. When compared to the current FY 2024 budget, this would be an 11.8% increase in revenues (from $24.6 million) and a 7.7% increase in expenditures (from $30 million). The city plans to hold the real property tax rate steady at 63 cents per $100 of assessed value. Real property tax currently generates approximately two-thirds of the city’s revenue.

Expenditures

Hyattsville’s charter requires the city to pass a budget where expenditures (the money actually spent) do not exceed the sum of revenues (pure income) and carry-forward balances (unused funds) from prior year surpluses. Though the new budget proposes expenditures in excess of new revenues, Hyattsville will use leftover general funds saved by the city to meet the charter requirements. Some other governments refer to the situation in which yearly expenditures exceed yearly revenues as an “operating deficit.” The term “deficit” has been controversial in Hyattsville City Council meetings. City Treasurer Ronald Brooks has repeatedly emphasized that the city is not proposing a “deficit” because, while proposed spending exceeds expected new income, it is still less than the total of new income and unused funds from prior years. Councilmember Sam Denes (Ward 1) proposed using the term “revenue shortfall” instead.

As in previous years, Hyattsville’s largest general fund department expense is the police department, which has $12.6 million of proposed expenditures — an 8.4% increase over FY 2024 ($11.7 million). Across all departments, Hyattsville spends two-thirds of its expenditures on staffing costs — a proposed $21.4 million for FY 2025 on wages, overtime, fringe benefits and a proposed cost-of-living adjustment. This represents a 4.9% increase in staffing-related expenses from FY 2024. According to the budget proposal, the city added 20 new staff roles in FY 2023 and FY 2024 and is requesting six new positions for FY 2025, including an additional accountant and a crime analyst.

Compared to the FY 2021 budget, the largest increase by department is in community development — the construction, operation, and support of housing — which has more than doubled its budget in this proposal. Expected FY 2025 revenues are 33% higher than budgeted FY 2021 revenues. Five departments — community development, general government, public works, police, and code compliance — have five-year budget increases greater than 33%.

The FY 2025 budget proposal reports actual spending for FY 2021 through FY 2023, and budget and partial-year amounts for FY 2024 — the current fiscal year. Due to intradepartmental reorganizations, apples-to-apples comparisons with prior budget books are difficult, but the proposed FY 2025 budget allows readers to compare proposed FY 2025 expenditures with actual expenditures from FY 2021 on a sub-department level. Seven sub-categories have more than doubled since FY 2021: Call-a-bus (251% increase), police special services (210%), public works administration (158%), mayor (131%), community development (127%), recreation/teen center (123%) and human resources (100%).

The final budget ordinance, or resolution, will present budgets for all four funds — general, special revenue, capital projects, and debt service — as in previous years. Though the bulk of the budget document is focused on the general fund, the city is also requesting $13.5 million in capital projects (high-cost, long-term projects to acquire, build, or improve property, including infrastructure and vehicles) funding for FY 2025. The capital projects section does not detail prior year spending, but the recently reissued FY 2021 audit revealed that the city exceeded its FY 2021 capital projects budget by approximately $2 million.

Revenues and comparisons

Hyattsville has gotten more affluent in recent years, with rising income and property wealth. From 2020 to 2022 (the most recent available data), Hyattsville’s average taxable income per tax return grew 19.5%, from $42,740 to $51,094, according to state records. The assessable real property tax base grew 33% between FY 2021 and the currently projected FY 2025, from $2.2 billion to $2.9 billion.

Because Hyattsville derives more than two-thirds of its revenue from property and income taxes, rising income and wealth will result in rising revenues if tax rates stay constant.

According to the city finance website, the city council will hold a first reading of the budget on May 20 and adopt the budget on June 3.


A version of this article originally appeared in Route One Finance.

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