Democrats Encourage Income Tax Hike for Washington County Amidst Rising Costs of Living

HAGERSTOWN, MD News (4/17/2024) – The United Democrats of Washington County (UDWC) have initiated a campaign urging registered Democrats in Washington County, MD, to advocate for an increase in income tax rates within the county. Amidst the UDWC’s push for a tax hike, concerns about the financial strain on Washington County residents should also be considered.

The communication, distributed via email and provided to RFHC, outlines the perceived necessity for this tax adjustment to address budgetary challenges faced by the county. The primary argument presented by the UDWC is the potential loss of state funds due to Washington County’s current income tax rate. Specifically, the email highlights the impact of previous tax cuts by the County Commissioners, which have resulted in the county receiving fewer “disparity grants” from the state. These grants are distributed to jurisdictions with per-capita tax revenues below 75% of the statewide average. The grants are tied to the county’s income tax rate, and by reducing the rate, Washington County has reportedly missed out on significant funding opportunities.

According to the email, over the past three years, Washington County has allegedly missed out on approximately $20.5 million in disparity grants due to reductions in the income tax rate. Furthermore, projections suggest that this loss could increase to nearly $30 million in the upcoming fiscal year. The email contends that increasing the income tax rate would not only help recoup these lost funds but also generate additional revenue to address pressing community needs, such as education and support for seniors. We would reference the original article written by Tamela Baker on this topic which the letter claims to be based upon, but unfortunately the article is locked behind a paywall.

The proposed tax increase would raise the income tax rate from its current level of 2.95% to the maximum allowable rate of 3.2% as set by the state. For the median household in Washington County, with an annual income of $66,832, this would equate to an additional tax burden of $167 annually, or approximately $14 per month. But can Washington County residents afford that extra $14 per month, when many are already struggling to put gas in their cars to get to work, or put food on the table? And another important question for residents to ask, does Washington County need the extra revenue?

The campaign, spearheaded by club member Dave Williams, aims to rally support for the proposed tax hike among county residents. The email encourages individuals to express their backing for the initiative by contacting the Washington County Commissioners via email or participating in public meetings scheduled throughout April and May.

Escalating costs of living, exemplified by the staggering rise in local gas prices averaging at $3.713 per gallon as of April 17, 2024, coupled with mounting expenses for food, have placed significant pressure on household budgets. Moreover, the recent surge in property tax assessments, as highlighted by the State of Maryland’s reassessment data, underscores the growing burden faced by property owners, which is in turn passed on to tenants even if they don’t own the property they’re living in.

The residential reassessment figures reveal a substantial 23.4% increase in property values since the last evaluation three years ago, reflecting a trend of consecutive annual rises. Particularly concerning is the disparity between the rate of increase in residential and commercial properties, with residential values surging by an average of 25.6%, exacerbating the financial strain on homeowners.

This is of course further complicated by Maryland legislature’s attempts to increase the maximum local income tax rate to 3.7% by 2026 through HB470. While HB470 appears to have died in committee this year, there’s nothing preventing the legislature from bringing it back next year, with a much higher chance of success during a non-election year. Would Washington County then be required to increase local income tax rates to 3.7% to continue receiving the disparity grants? Most likely.

Residents interested in contacting the County Commissioners in support of or against an income tax increase can do so using the contact information available on the county website.

Story by Ken Buckler, President of RFHC. The original letter emailed to county residents is reprinted below.

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