If you’re a regular reader of this Weekly Letter, you know by now that they go below the surface on topics of the week. I write about why things happen, how they happen, and sometimes even what it feels like from my seat. Any political consultant worth their salt would advise me against writing in that way about raising taxes. But it’s a big deal, so here goes.
Let me start with how it feels. Pretty simple. It kinda sucks.
I didn’t actually raise taxes this week. I proposed a budget to the County Council that raises them. Even that sucks.
Don’t get me wrong. I firmly believe that I did the right thing. As I said in the Budget Speech (text here and video here), “Fiscal discipline means having a funding source for whatever you plan to spend.” Every successful business owner knows that, and practicing it is how we got three AAA bond ratings.
But certain things were moral imperatives in this budget, like filling 200 vacant teaching positions at our schools by getting our pay closer to where it is in Prince Georges, Howard, Baltimore, Montgomery, and elsewhere; continuing the food assistance, eviction prevention, and crisis counseling that we started during the pandemic; hiring the police officers and firefighters that we need to meet current demand; and making up for a market-driven $88 million drop in revenue from real estate transfers.
Funding Our Future is how we branded the budget, and it’s what we’re doing. I’m damn proud that we’re investing in children, families, our environment, and our essential institutions, and that we’re setting our county up to withstand future economic challenges.
I feel really good about keeping the income tax rates steady for 98% of our residents, and I like the fact that our budget keeps both income and property taxes well below those of all central Maryland counties for everyone.
The property tax increase is within the spirit of the tax cap imposed by voters during our 1992 tax revolt. The cap went up 3% last year and 2% this year because of inflation, and our two year increase is only 4.7%.
And that income tax increase for the 2% who report taxable income over $400k for individuals or $480k for joint filers is a graduated tax, so they aren’t paying the same 3.2% they’d pay in neighboring counties. They’re averaging 3.0%.
But still, there’s no way around it. I am asking people - no it’s worse than that - I am forcing people to pay more in taxes. If you own a home assessed at $400k and don’t have an exemption, it’s $188, or $15.66 per month. For the folks who spend that on a bottle of wine, I don’t lose sleep over it, but for somebody who happens to own a nice home but is having a bad year on the income side, it’s a burden. I wish we had a way to lower rates for those folks.
Raising taxes is like regulating businesses. You should feel the pain you’re inflicting. If the gain is greater than the pain, not for the political leader making the decision, but for the people being impacted, then you do it, know it’s the right thing to do, go to bed that night, and get up the next day to make more decisions.
That’s what I did Monday night and Tuesday morning, and I guess that’s what I’ll do for the next three-and-a-half years.
But hopefully, I won’t have to raise taxes again.
If you want to feel better about where your tax dollars are going, check out this truly compelling video about the biggest investment in this year’s budget - teacher pay.
Steuart Pittman
Anne Arundel County Executive