In which I criticize Maryland Gov. Larry Hogan

I love Governor Hogan, and I think he’s doing a great job in Maryland.  I love that he’s been able to balance the budget without raising our taxes again. Reducing the tolls, while it doesn’t affect me, seems like a great move to make MD more friendly to tourists and truckers.  I personally appreciate the military retirement tax relief increase.  This particular post has become even harder to write after the Governor announced he had Non-Hodgkins Lymphoma, and just started chemo to treat & hopefully beat his cancer.  Lord knows my prayers are with him and his family as they go through this difficult time.

hogan-raintaxrepealBut I’ve got a major beef with his current push to take credit for repealing the “rain tax.”  He did not repeal the tax. He repealed the state mandate that the affected counties had to charge a fee.  The federal mandate that those specific counties continue to come up with money to fund the storm water clean up still continues. Three counties have either never enacted the fee in the first place, or repealed their “rain tax” fee.  Baltimore County reduced its fee by a third.  But so far, none of the other counties have tried to repeal their fees. In my home county of Prince George’s, the County Executive Rushern Baker has already said that he will not attempt to reduce or repeal the fee in PG County.  He told the Baltimore Sun that he’d have to slash things like education to come up with the federally mandated funds. So it is disingenuous for Governor Hogan and his team to sit in Annapolis and brag about “repealing the rain tax.”

Then there’s the purple line fiasco. The Governor rightly rejected the Red line in Baltimore as the money-pit that it is, but he said the Purple line would go forward, provided Montgomery and PG County pony up more cash.  Really, he should have just vetoed it outright.  The counties now have to decide if they think it’s worth it to raise taxes in order to pay for it, because neither county has any extra cash to throw at this project.  Montgomery County is dealing with the fall out from a double-taxation lawsuit they lost. PG County barely got a budget passed after they raised property taxes for the first time since 1979, possibly in violation of TRIM. It’s once again disingenuous for Governor Hogan and his team to say they approved the Purple Line.  In reality, it’s been approved conditionally, and those conditions are very unlikely to be met without counties raising taxes on their citizens.   I’m hoping this is just some sort of strategic move on his part to try to save the state some money and appease some voters while turning public sentiment against the idea.

All in all, I like Governor Hogan, and I think he’s doing the best job he can.  His handling of the Baltimore Riots was spot on, despite all the shade Mayor Rawlings-Blake tries to throw at him for it.  I wish him nothing but the best of luck in getting cooperation out of the Democratic-controlled General Assembly.  He tried to get the automatic increase in the gas tax stopped, but couldn’t get it through the General Assembly. I just wish that he would take this opportunity to educate the people about the federal mandates that kill the state and local budgets.  I also hope that his wording of the “rain tax repeal” doesn’t come back to bite him in the rear.

 

PG County Executive & Council Chairman in a Pissing Match; Taxpayers Get Soaked.

Short version:

The PG County Executive, Rushern Baker, wants a double-digit property tax increase to fund schools, and is using a 2012 state law to get around the limits and requirements in the PG County Charter. The Council, led by Chairman Mel Franklin, vetoed the 15% increase, replaced it with a 4% increase, and added a penny increase to the Parks & Planning tax rate. Mr. Baker said that wasn’t good enough, vetoed the Council’s budget. The Council overrode his veto, which pissed Mr. Baker off. So he vetoed their budget again, and sent back one with an 11% increase in Property tax, and threatened legal action if the council didn’t pass his budget. The Council has once again overridden the County Executive’s budget, and passed their version.

Meanwhile, the taxpayers will see their property taxes increase, as well as their phone bills and the cost of various permits and licenses, despite very public outcry against the increases. Taxpayers are left feeling like no one is listening, and the only question now is how much will taxes increase.

 

pgcopissingmatch-sm

The TL;DR version:

Back in 1978, the citizens of Prince George’s County did something absolutely brilliant.  They passed a law that capped their property tax rate at the 1979 rate, affectionately known as TRIM (Tax Reform Initiative by Marylanders).  When TRIM was challenged in 1996, the voters in this very blue county not only upheld TRIM, but also passed into law the Approval of New or Additional Taxes by Referendum, which said the county government could NOT raise any taxes without asking the public to vote on it.

People who have been involved in PG County Politics much longer than I remember the Park & Planning Surplus scheme.  Fast forward to the height of the housing bubble in about 2005/2006. Maryland has this thing called the “Homestead Tax Credit” which was very helpful to families who saw their property assessments soaring.  The Homestead Tax Credit capped the amount your property tax bill could rise each year to 10% of the previous year’s assessment.  Thing was, the PG County half of the Maryland-National Capitol Park & Planning Commission had long before decided that the Homestead Tax Credit did NOT apply to it.  So P&P was taxing people on the full assessed property values, not the Homestead Tax Credit capped values.  This resulted in a HUGE surplus of cash sitting in the PG M-NCPPC account.  Once the folks in the county government realized how much extra there was, they started lining up with their hands out and a list of projects to do.  P&P also had ideas for the money, as they had their own list of maintenance issues and whatnot that needed attention.  Everything was rolling along so well.

Then the housing bubble burst. When the county went to the state delegation for funding, the state delegates took one look at the beefy account in P&P, and said use that money to plug the holes until the economy turns around.  That right there was a violation of the taxpayer’s trust, as money that had been taken for use in parks and such was now being used to fill the holes all across the county budget. But the economy didn’t recover as fast as hoped, and the county had to keep raiding the P&P fund to fund the budget.  That is until Martin O’Malley signed a bill restricting Park & Planning to the Homestead Tax Credit assessed value levels in 2010.  After that, the money quickly dried up, and P&P was left with a HUGE list of projects, and an ever-shrinking bank account to fund everything.

In 2012, one of the constant attempts by government officials to circumvent TRIM got approved in Annapolis, under Martin O’Malley.  The State Delegation from PG County supported SB 848 2012, also known as the Education Maintenance of Effort bill. SB848 allows county governments to violate the taxing restrictions in their charters for the express purpose of “maintaining the effort” for the county school system.  “Maintenance of Effort” is defined in the bill as the level of funding from last year, and the bill makes it next to impossible to cut education spending at all.  Any reduction in education spending must be granted a waiver from the state.  Operating any large system like this and not allowing the potential for cuts leads to a situation ripe for corruption, cronyism, and abuse.  Just recently the entire school board gave up their county credit cards because of wasteful, fraudulent spending on the part of several members.

County Executive Baker has his eyes on higher office.  It’s well known to anyone who follows PG County politics that Mr. Baker wants to take a shot at the Governor’s Mansion.  According to the Washington Post, “He told residents and business leaders that rehabilitating the education system would be the centerpiece of his legacy.”  He needs to drastically improve the school system, especially since he took it over just a few years ago, in order to have something he can use in his campaign for Governor.  So SB 848 2012 is the bill that Mr. Baker is using to claim he can raise property taxes in PG County by whatever amount he deems necessary for the school system.  Mr. Baker wants to is increase school funding dramatically, and he assumes that the citizens will go along with it because “it’s for the kids.”  He started asking for a 133 million dollar increase, then tried to settle for a 65 million dollar increase. The County Council will only approve a 34 million dollar increase.  There is a group of citizens, PG Tax Watch, who want to fight any increase, claiming that SB 848 2012 doesn’t apply here, and they may be right.  However, they will face an uphill battle as the State’s Attorney General’s office has already come down on the side of the County Executive. The one thing the letter from the AG’s office does not address though, is whether SB 848 2012 can be used to increase school funding. PG County has more than enough in the budget to fund the school at last year’s level without raising taxes, therefore, neither increase is needed to meet the Maintenance of Effort.

Meanwhile, the County Council, led by Chairman Mel Franklin, have declared that simply throwing money at the school system is not going to fix the myriad of problems there.  They want to increase funding for P&P instead. It seems that P&P told the Council & Executive that they are operating in a deficit this year, but have enough in the bank to cover next year.  After that though, they will be in big trouble, financially.  Councilman Franklin is rumored to have his eyes on the County Executive job when they both term limit out in 2018.  The last thing he wants to do right now is enforce a double digit increase in the property tax.  He realizes that’s political suicide. Instead, he wants to do a much smaller increase, a 4% increase that looks completely reasonable up against Mr. Baker’s proposal of 15%. He also wants to plug that hole in P&P because one of the projects that has gotten underway is a HUGE new aquatic & recreation center near Gwynn Park High School.  It’s one of the things he promised to bring to the area, and he wants to deliver.

Baker’s original proposed budget got shot down by Franklin & Co.  He got upset and vetoed their version of the budget, and resubmitted his own again.  They overrode his veto, and sent their budget back to him.  Baker then got really upset and vetoed the Council’s budget a second time, and vaguely threatened legal action if they don’t pass his budget.  The Franklin-led council promptly overrode Baker’s veto a second time, and essential told Baker to “bring it.”  Now the county’s budget is in limbo while we all await the County Executive’s next move.

Questions Surround Nansemond Cold Storage Refund

When this story first broke last week, something seemed fishy. I am all for someone who was double-taxed getting a refund. I’m also all for saving the city money, but not when it means breaking the law to do so.

The city quotes a section of law saying the court must decide to justify bypassing the court, then tells us that the 3 years clause mentioned in the code limits their ability to get the rehabilitation credit back.

The city quoted a state statute reading in part, “When it is shown to the satisfaction of the court that there has been a double taxation … the court may order such erroneous taxes to be corrected.”

“We resolved a matter which the property owner had a right to bring to court,” said William Hutchings, deputy city attorney. (Source – Suffolk News Herald)

The relevant portion of the Virginia state code can be found in § 58.1-1820 – 1830, especially § 58.1-1825, § 58.1-1826, & § 58.1-1827.

VA State Code § 58.1-1825 says in Paragraph A that anybody who has issue with their taxes is supposed to file in court:

A. Any person assessed with any tax administered by the Department of Taxation and aggrieved by any such assessment, or aggrieved by an action by the Department with respect to a transferred credit or other tax attribute, may, unless otherwise specifically provided by law, within (i) three years from the date such assessment is made or (ii) one year from the date of the Tax Commissioner’s determination under § 58.1-1822, whichever is later, apply to a circuit court for relief. The venue for such proceeding shall be as specified in subdivision 13 b of § 8.01-261. The application shall be before the court when it is filed in the clerk’s office.

The most relevant paragraph in the VA State Code is:

§ 58.1-1827. Correction of double assessments.

Irrespective of the foregoing provisions, when it is shown to the satisfaction of the court that there has been a double assessment in any case, one of which assessments is proper and the other erroneous, and that a proper single tax has been paid thereon, the court may order that such erroneous assessment be corrected, whether the erroneous tax has been paid or not and even though the application was not made within the period of limitation, as herein before required.

Both of those sections of State Code specifically say that the court is an integral part of the equation, yet the City Assessor approved of the refund, and the City Treasurer cut the check on March 19, 2013, with NO involvement from the City Attorney, City Manager, or City Council. The worst part, according to City Spokesperson Debbie George, there are no settlement documents.

“There was no settlement document,” George stated. “The city attorney and the city manager were not aware of the refund until after it had been issued.”

If that wasn’t bad enough, we also found out that Nansemond Cold Storage was receiving a rehabilitation credit they there were not entitled to receive. But according to the city, we can not recoup that money at all.

The city now says the same three-year rule it claims it lawfully circumvented to issue the costly refund also drastically limited how far it could back-charge Nansemond Cold Storage for lost revenue from the erroneous rehabilitation credit.

Maybe, if they had taken this to court like the law says, maybe the court would have been able to decide that the Rehab Credit erroneously given, should be deducted from the amount refunded, since Nansemond Cold Storage already had that money. But we will never know, because the CITY DID NOT OBEY THE LAW!

Tax, Water Rate Increases Pass Council

Wednesday night, the council passed the budget as written with the 6 cent property tax increase & the water rate increases. The vote was 5-3. Councilman Fawcett voted against the water increases and Councilmen Ward & Duman voted against it because they wanted to take over a million dollars from a savings account the city has set aside for emergencies and give it to the school system for an HVAC system.

But, on the plus side, we did win a few small concessions. I don’t want anyone in our group to feel like we failed. If we had not spoken out, the tax increase would likely have been much higher. Remember, at the budget hearing in March, they were talking about anywhere from 11-23 cent increases to pay for so much more. It is because we spoke out that the 2 projects were deferred (the Library land acquisition, & the Bennett’s Creek Rec Center – located 700 yards from Creekside Rec).

We did well for our first time really challenging the budget process. Folks in the city government now know, without a doubt, that we are not only out here, but active & educated about the process. Several councilmen now know our leadership by sight, and on more than one occasion have actively sought out our leadership for discussions. It may not seem like we accomplished much, but we did.

http://www.suffolknewsherald.com/2013/05/01/513m-budget-passed/

http://hamptonroads.com/2013/05/suffolk-property-tax-rate-climb-6-cents

More than just property taxes are going up!

tellcouncilno

The budget presented to City Council at their last Work Session not only raises our real estate property taxes, it will also increase our HRUBS bills by 10%!

The city has decided to pay for the water projects in the CIP by raising the fees on your water & sewer, this way they can claim to keep property tax low, but still get more money from the citizens. The water usage fee will increase 9.9%, while the sewer fee will increase 8.8%, because of other facets of the HRUBS bill, it means roughly a 10% increase. This means if you have a water bill that averages about $220 every two months, this increase will cost you another $22 every two months. That’s $130 extra a year.

Real Estate Property Tax is determined by the value of your property. This year’s budget will increase your property tax by $0.06. For every $100 dollars of value, you are currently paying $0.97. This year’s budget raises that rate to $1.03. So if your home is currently assessed at $175,000, your new tax bill would be $1,802.05 – about $105 more than last year. Keep in mind, the more money the city says your property is worth, the more money they can collect from you in taxes on it. This is why there are a few developers and a hotel currently bringing a lawsuit against the city for over-inflating their property tax assessments for the last several years. By the way, this property tax increase will affect renters too. When your landlord’s tax bill for the property you are renting increases, where do you think he will get the money for to pay it? Our co-chairman, Janet, would like to encourage everyone to take a good look at their current assessment. Is there any way you could sell your property at that price today? If not, call the assessor’s office and ask to have your assessment adjusted.

City Council has proven that they are listening to us! We can not back down now! All of us, when faced with the prospect of earning less money this year than last, are forced to cut our budgets & make do with less. Yet when the city is faced with less money, they raise our taxes and keep right on spending. It’s time for City Council to tighten the city’s financial belt and make some tough choices.

Call your councilman. Let him know that this water/sewer fee increase is an outrageous tax on the hardworking people of Suffolk. Tell them the 6 cent increase in property taxes is unacceptable in today’s economy. But most importantly, show up to the next council meeting, April 17, 2013 at 7pm at City Hall. Get there early, bring signs. Be prepared to stay for the long haul. We must make our voices the loudest in the room in order to make sure that the City Council, the City Manager, and even the School Board hear our message.

Celebrate the Small Stuff

victory

Just about everyone in Suffolk agrees on one thing: City Council does NOT listen to the people. However, City Council is listening to us! True, the budget still includes a property tax increase, and a water/sewer fee increase, however, two projects we spoke out against were deferred! There is even better evidence beyond that, proving Council & the City Manager are paying attention to US!

The biggest victory is, of course, the deferment of two projects. The “Central Library” plan, which was to replace Morgan Memorial, was slated to spend 1.5 million dollars acquiring land in the coming year, while the building itself was not slated to be built until 2019 at the earliest. That would have meant 5 years of that area of property being off the tax rolls, not to mention the businesses that would have been shut down during the acquisition. This was NOT a good idea in this economy. You complained, City Council listened. The project will likely come up again in the future, but for this coming year, it’s off the books.

The other project that was deferred was the Bennett’s Creek Rec Center. This particular rec center was to have been built a short 700 yards from the existing Creekside Rec Center. It would have cost the city 1.25 million dollars to renovate the building & surrounding land in the coming year and would have added over $400,000 a year in maintenance, upkeep, & salaries.

The deferment of these two projects will reduce the rate of spending growth by 2.7 million dollars! Everyone who called their councilman, or showed up to the March 18th budget meeting, you did that!

Another piece of evidence that the Suffolk HRTP has gotten the attention of City Council, was the numerous times that multiple councilmen & government representatives kept insisting that the budget that has been released is a line-item budget. Even better, the documents were released at the time the Work Session started, when it would normally take 24 hours or more to for the city to get them online.

The last bit of evidence that proves our voices are being heard; the city manager’s letter directly addressed the question of reducing the fleet, an item brought up by several of our members at the March 18th Budget Meeting. She of course was against such a measure, but the point is, she addressed it! Ms. Selena Cuffee-Glenn responded to us!

While there is still much work to be done in Suffolk, it is important for us to celebrate these small victories and realize that we ARE making a difference in Suffolk.

Now, back to work.

Governor McDonnell wants to raise your taxes.

Anyone who has been paying attention knows the HB 2313 started out as the Governor’s Transportation Bill, but has been warped into a massive tax increase by the General Assembly, that included an extra sales tax for our area, Hampton Roads. State AG Ken Cuccinelli had declared HB 2313 to be against the state constitution because of the extra special tax levied on certain areas, NoVa & Hampton Roads. Virginians who have been hoping that the Governor would veto this hot mess saw their hopes dashed this morning. Gov. Bob McDonnell has amended HB2313 to EXPAND the area considered for the extra Hampton Roads tax.

“He [Cuccinelli] also said the road bill’s imposition of a 6 percent sales tax in Hampton Roads and Northern Virginia – higher than the 5.3 percent that other Virginians would pay – is unconstitutional.

According to legislators involved in the transportation discussions, several technical amendments are being proposed to help the bill withstand possible legal challenges. One would expand the bill’s definition of Hampton Roads to include Southampton and Surry counties, which would match other state delineations of the region.

The road funding bill, HB 2313, aims to raise $880 million annually for highway, rail and mass transit programs. And the new revenue would shore up Virginia’s road maintenance fund, which in recent years has siphoned dollars earmarked for construction.

The bill is also expected to raise $220 million more a year for Hampton Roads and roughly $300 million in Northern Virginia from the local levies.

The legislation’s key funding mechanisms include raising the sales tax on everyday purchases; converting the per-gallon gasoline tax to a wholesale rate; banking on hoped-for Internet sales tax collections; raising the sales tax on automobiles; and adding a $100 registration fee for alternative-fuel vehicles.

Legislative sources said Monday evening they expect McDonnell to reduce that charge; one said it could fall to $64.

A spokesman for the governor’s office declined to comment on the substance of any proposed amendments.

There’s been pushback on the hybrid fee, which is one of the smaller revenue items in the bill, raising just $10 million in the first year. McDonnell has promised to cancel the fee altogether on electric mopeds. Current law charges a $50 fee on electric cars.”

Read more here.