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.
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.