CHESTERTOWN — Increased school funding and a break for municipal residents being double taxed by the towns and the county were sought by those who spoke at a public hearing Tuesday on the Kent County Commissioners’ proposed budget.
While the commissioners have been holding weekly budget workshops since April, Tuesday’s hearing was the first public presentation of the draft Fiscal Year 2020 budget. A draft had been provided to the Kent County News the week prior.
It was a standing-room only crowd in the commissioners hearing room Tuesday. Audience members were given three minutes each to make their case. The floor was first opened to public officials, who were not given a time limit.
The commissioners expect to vote on the proposed spending plan Tuesday, June 11. Once approved, the budget takes effect July 1. A copy of the proposed FY 2020 budget can be found at www.kentcounty.com/government.
For commissioners Tom Mason, president of the board, and Bob Jacob, this was their first budget season. They were elected to the three-man board last fall. Longtime Commissioner Ron Fithian was the sole incumbent re-elected.
“This has been a very difficult assignment, trying to figure out how to allocate the limited resources we have this year,” Mason said, reading from a statement at the start of the hearing.
He said departments and agencies receiving county money submitted about $10 million in new funding requests. He said if the county had granted all those requests, it would have necessitated a property tax increase of 30 cents for every $100 of assessed value.
“This would have made us second in the state (for property taxes), behind Baltimore City. And this room would be more than packed,” Mason told the crowd.
Pat Merritt, the county’s chief financial officer, provided a breakdown of the numbers before the floor was opened for public comment Tuesday.
The proposed FY 2020 budget shows revenues of nearly $49.8 million, an increase of about $2.2 million from the current year. Total expenditures are budgeted at more than $50.8 million, up $1.4 million from this year.
The revenue shortfall of $1.05 million is slated to be covered by the county's fund balance, previously accrued yet unspent money. That would leave a little less than $3.8 million in the fund balance.
The property tax rate is set at the same rate as the current year, $1.022 per $100 of assessed value, while the income tax rate is slated to rise from 2.85% to 3.2%. The property tax yield is expected to be $31.5 million, an increase of $560,258 from the current year. The income tax is budgeted to yield $13.85 million, an $863,600 increase.
The new income tax rate is a 12% increase expected to yield a total of $1.6 million in additional revenue over three years: $650,000 next year, $750,000 in FY 2021 and $200,000 in FY 2022.
The commissioners also propose a 6% rate increase for water and sewer fees, generating a $142,000 increase in annual revenue.
Merritt showed how revenues have been flat since FY 2014. A graph showed total revenues that year came to $47.6 million against $47.7 million in FY 2019. Property taxes account for 63% of the county budget, followed by income tax accounting for 28% and other revenues making up the final 9%.
“So there's been virtually no growth in five years. And I cannot overstate what a challenge this lack of revenue growth has been for the county and the agencies that the county funds,” Merritt said at Tuesday’s hearing.
Kent County has the seventh-highest property tax rate in the state and second-highest on the Eastern Shore behind Cecil County.
Mason said the county needs to work on bringing the property tax rate down and encouraging new businesses to locate here.
In reviewing expenditures, Kent County Public Schools accounts for $18.7 million of recurring expenditures in the county budget. Public safety follows at about $11 million, general government at $6.8 million, public works at $5.3 million and culture and recreation rounding out the top five recurring expenditures at $2.4 million.
The capital projects budget is set at nearly $3.3 million, with $2.3 million going to school projects — renovations at Galena and Rock Hall elementary schools and new security vestibules at all five schools — and $956,000 for county projects.
Increases and Decreases
The largest spending increase listed in the budget is operating expenses for Kent County Public Schools. The district receives the bulk of its funding from the county, followed by the state.
The commissioners propose $18.9 million for KCPS. That breaks down to $18 million for operating costs, $645,938 for debt service and $211,597 for debt repayment on the vacant Millington Elementary School building, which is being surplussed back to the county for use, sale or lease.
The $18 million in operating costs for KCPS is a nearly $850,000 increase from the current year's budget. That also is the highest expenditure increase by dollar amount shown in the county budget.
Merritt said this year's KCPS allocation is $1.1 million above maintenance of effort, the state-mandated funding floor for the district. When a county increases maintenance of effort, it must at least match that allocation, based on a per pupil rate, in the years following. Merritt said this year, the increase comes to $470 per student.
After KCPS, the county's next highest funding increase is slated for highways and streets under the Public Works budget. The budget shows nearly $3.9 million for highways and streets, a $264,436 increase.
The Department of Planning, Housing and Zoning is slated for $943,550 in next year's budget, a $238,518 increase.
The next highest budget increases both fall under the Public Safety budget. Emergency medical services is set to be funded at just shy of $1.7 million, which is an increase of $227,889 from the current year. Law enforcement is budgeted at more than $3.4 million for next year, a boost of $178,905.
Under General Government, building maintenance is set to receive about $1.4 million, an increase of $153,771, and information technology is listed at more than $1 million, a $150,032 increase. Also under the General Government budget, the commissioners line item is slated for $545,581, a $95,991 increase resulting from restructuring efforts.
The final six-figure increase is going to the Department of Parks and Recreation. Budgeted next year at nearly $1.8 million, the department is set to see a funding increase of $128,784.
Under Public Safety, the Board of License Commissioners shows a funding decrease of $20,813. The Public Works budget shows a $65,137 decrease for engineering and administration and a drop of $54,453 for environmental operations. Under Social Services, public transportation provider Delmarva Community Services is slated for a $680 cut and the Kent Center is looking at a funding reduction of $9,000. The Parks, Recreation and Culture budget shows a $965 decrease for Museums of Kent. The Conservation of Natural Resources budget lists a $2,483 funding decrease for Soil Conservation Service. The county's economic development line item shows a decrease of $4,560.
“We as commissioners only allocate money to the schools. We do not say where it should be spent. But my hope is it will be used to compensate our teachers in areas that directly effect the education of our children. I know this is not the total amount asked for, but all of us sitting up here and in the audience support our schools and want to make them stronger and better,” Mason said, adding that he believes the county has good schools.
Mason urged anyone planning to speak in favor of more money for school to also go to Annapolis and make the case before state officials for improved education funding.
“I am one of the several parents, the many parents, who have taken time off of work this year to go to Annapolis and speak with our representatives to advocate for more funding for our schools. I would love it if you as our commissioners would do the same,” said Chestertown resident Darren Tilghman at the hearing.
The Board of Education has not approved Superintendent Karen Couch's budget yet, though it held a public hearing in March on her proposed spending plan.
Couch's budget shows more than $18.8 million from the county in operating expenses alone. That makes the county's proposed allocation for operating expenses $784,584 less than Couch's request.
Reflected in the increase Couch seeks for KCPS is nearly $550,000 for 11 new positions: three content specialists to bolster the curriculum, three helping teacher positions to assist school-level administrators and five 10-month secretary positions to monitor security vestibules being added to all five schools. Also factored in are pay raises and increases in costs for health insurance and other benefits.
Robbi Behr, Rebecca Heriz-Smith and Francoise Sullivan, organizers of the grassroots Support Our Schools initiative spoke at the hearing, seeking full funding of Couch's budget request and calling for an efficiency study of the county government to see where improvements could be made and cost savings could be found.
“SOS has identified a pattern of miscalculation of needs in the county budget consistently for the last 4 years, resulting in an average of $2.6 million per year being directed to areas where it is left unused,” reads a statement provided by SOS. “Addressing the causes of over budgeting and allocating those funds to unmet needs through the budget process would create a more equitable and sustainable formula for funding Kent County.”
Members of the group met with county officials prior to the hearing to make their pitch.
In looking at the KCPS budget request for next year during a May 28 budget workshop, Mason agreed with some of the new positions sought by Couch and disagreed with others, notably the secretaries watching the security vestibules.
"If I come back here this time next year — and I’m going to be quite blunt about it and I don’t want to dominate this and maybe I’ll be the bad guy, I don’t know — but if I see five positions hired for secretaries for these vestibules, I’m going to be very upset because I don’t think we need them,” he said, adding that he does not have a good idea of how many people need to be vetted going in and out of schools.
Couch said the principals have been tracking the numbers. She said on one day, Garnet Elementary School in Chestertown had more than 100 visitors. She said the schools use volunteers, host meetings and see guests coming in and out.
Mason favored giving staff raises. Fithian joined him in saying he favors adding the content specialist positions, though whether the district could afford all three next year remained a question.
Mason also said he wants to see accountability for the additional funds being budgeted for KCPS.
"I’d like to have what test scores you are evaluated on now. And then next year, I want to see what they are next year. And I want them to be higher,” Mason told Couch at the May 28 workshop. “And so we want to see higher performance. I don’t that’s wrong to ask that."
He also said he did not want to hear next year that the district lost another 100 students.
Board of Education President Joe Goetz said that is not just a district problem.
Mason said that when he hears of parents choosing to home school children because of disciplinary issues in classrooms, that is a district problem.
Couch asked if it is a county problem when parents pull their children out of Kent County schools and move due to a lack of jobs here.
Mason agreed that would be a county problem.
“I have not heard of a student leaving — and I’m not saying it hasn’t happened — because there’s no job. I’m sure there's some, because there's always some. But it’s something that we’re definitely as commissioners, we’re trying to make economic development to where we can have more jobs in this county. It’s not a fast process, but that’s just the way it is,” Mason said.
The commissioners agreed at the May 28 workshop to move $100,000 into the KCPS budget, bringing it to the $18.9 million currently shown.
"Here again, in a perfect world, we’d give you everything you want. But it's not a perfect world,” Mason told Couch at the workshop.
“You have hard decisions, and we in turn will have hard decisions to make too. It’s not easy for us either. We’re certainly going to have to look at some cuts we’re going to have to make,” Couch replied.
Mason had also voiced his concern at the workshop about the public hearing to come, saying he did not want it to be as acrimonious as in previous years. He asked if Couch could help spread the word about how fair the budget process was regarding schools.
During her remarks at the public hearing, Couch spoke about how she was thankful for the “thoughtful and collaborative” discussions the commissioners had with her, administrators and Board of Education members over the budget.
“I know we don't always agree and I acknowledge that. And I think sometimes we have to agree to disagree,” Couch told the commissioners at the hearing, adding that she and the Board of Education will still have some tough decisions to make.
Some municipal leaders in Kent County, notably Chestertown Mayor Chris Cerino and Councilman David Foster, have sought a return of funds the county previously gave the towns. Town property owners pay both municipal and county taxes, and Cerino and Foster are seeking a break for those residents.
While the commissioners entertained the idea of providing some relief to municipal taxpayers this year, they instead reallocated the nearly $100,000 set aside for it during the May 28 workshop. Those were the additional funds the commissioners added to the KCPS budget.
At the May 28 workshop, Mason said the towns should expect to see a boost in revenue from the county's income tax hike.
"I don't want this to be, 'We're against the town,'" Mason said. "Because we are giving them money by raising the piggyback tax."
Fithian said he took exception to being asked to "correct a problem that somebody 50 or so years ago started."
"You make your own decisions, you have your own taxing authority. You have means to raise your revenue, run your own show. And to come back now after something’s been working this way for 150 or so years I think its almost impossible for us without a major, major change," he said of the towns.
Jacob wanted to wait on providing tax relief for the towns.
"You can’t fix everything in your budget at once, so I don’t mind holding off on that,” he said at the workshop.
Cerino and Foster were among those who spoke at the public hearing Tuesday. They argued that those municipal residents paying the full county property tax rate are not receiving county services their money goes toward but the towns supply instead.
Cerino said residents in Kent's five incorporated towns comprise a third of the county population, with Chestertown alone totally a fourth of the population.
Foster said the towns are where residential and commercial growth are most likely to occur.
Chestertown has its own police department, planning office and road crew. Cerino and Foster argued that town residents pay the county as well for those services but do not receive them from the county. Cerino said the towns providing those services take that burden off the county's plate.
“We are paying for phantom services,” Cerino told the commissioners. “When you're showing me a $50 million budget, of which Chestertown probably funds more than a quarter, and you're telling me you can't carve out a hundred grand a year to help us, to compensate us for services we're already paying you for, I am telling you that is a scam.”
Cerino provided a sheet showing the tax differentials offered by other jurisdictions.
In Caroline County, depending on the town, municipal residents receive a break on their county taxes ranging from 7 to 10 cents for every $100 of assessed property value. In Talbot County, which has the lowest property tax rate in the state, it ranges from 6 to 13 cents depending on the town.
Other counties offer a grant directly to the towns to offset the dual taxation. The grants range in Cecil County from $13,000 for Cecilton to $340,375 for Elkton. In Worcester County, it goes from $565,000 for Pocomoke City to nearly $3.4 million for Ocean City.
“Now if Delmarva (Power) were to charge me the same rate as everyone else but provide me half the services, I would call that fraud. Wouldn't you? What should we call it when the local government does the same thing to us, charges us the full rate but provides half the services solely because of our location solely, because we live in an incorporated municipality,” Foster said at the public hearing.
Cerino and others also voiced concern about how commissioners appeared to turn it into a choice between offering a tax differential and adding funding to the KCPS budget.
“Please don't pitch the town against the schools,” Behr said, as County Administrator Shelley Heller called “Time.” It was the only point in the meeting when a speaker was told their three minutes were up.
Additional requests came at Tuesday's from Gren Whitman and Bill Herb, who asked the commissioners to cancel out $17,000 in funding for the Clean Chesapeake Coalition.
The group, chaired by Fithian, has been lobbying for action against the Conowingo Dam at the top of the Chesapeake Bay, arguing that owner Exelon needs to combat pollution that flows through the it.
Whitman and Herb questioned if the coalition had actually yielded any results and whether its funding with taxpayer money was appropriate, or even ethical due to Fithian's position in the group.
Representing the Kent County Soil and Water Conservation District, Karen Miller sought to have some of the county funds slated to be cut from her budget returned so she could provide staff raises.
Members of the Social Action Committee for Racial Justice spoke to the commissioners about the need to provide additional support for KCPS recruiting efforts, to get more people of color teaching and serving as administrators in schools.
Worton resident Robert Kramer, a fixture at county meetings, said it was the best budget hearing he had ever sat through. He called for greater community engagement with local government.
“You've got to go to the town council meetings. They don't lock the doors. You've got to go to these meetings,” Kramer told the crowd. “I urge you to come and participate like you have tonight.”
The next commissioners meeting will be held at 6 p.m. Tuesday, June 11, at the R. Clayton Mitchell Jr. Government Center at 400 High St., Chestertown. Agendas are posted on the county’s website.