The Anne Arundel County Council today will consider a resolution to cap the county income tax rate at 2.5%. If approved, the resolution, introduced by Councilmember Nathan Volke, would be placed on the 2020 ballot as a referendum question.
County Executive Steuart Pittman’s FY 20 budget proposes raising the property tax rate from 90.2 cents to 93.5 cents per $100 assessed value and the income tax rate from 2.5% to 2.81%. Due to the County’s self-imposed property tax cap, which limits the total annual increase in property tax revenues to the lesser of 4.5% or the increase in the Consumer Price Index (CPI), the revenues generated from any increase beyond the cap ($26.6 million) must be spent on education.
According to The Baltimore Sun:
Volke said he put forth the resolution to let residents decide on the tax increase. He said choose 2.5% since its the current rate and close to previous rates in the past 20 years.
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Passing the resolution will prove difficult for Volke, who has to convince two Democrats to join his cause. The council has a Democratic 4-3 majority, and charter amendment resolutions require a supermajority.
In an effort to reduce reliance on the local property tax, legislation was enacted in 1967 authorizing local governments to impose a local personal income tax. Prior to 1967, local governments received a share of the State income tax. Local governments are authorized to set a local income tax rate of at least 1.0% but not more than 3.2%.
The Anne Arundel County Council will continue to hold hearings on County Executive Pittman’s proposed budget. The Council must pass a balanced budget by June 14th.
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