Your Action Is Needed to Ensure Fair Tax Duplication Payments

“The Council of Takoma Park calls on the County Executive and Council to recognize the complementary work done by the County and municipalities in making our communities safe, attractive, and welcoming and to finally rectify this long-standing inequity.” — Resolution 2021-8 Demanding Fair Tax Duplication Payments

– City of Takoma Park, March 10, 2021

As the County Council begins to work on the County’s budget, it is time that we renew our calls for the County to address the long-overdue issue of tax duplication. This is the year to do it.

The Takoma Park City Council passed a resolution calling on the Montgomery County Council to finally pay the tax duplication rebates they owe our city. Every year, residents of Takoma Park and other municipalities in Montgomery County pay both the County and their cities for services that only their cities provide them. To account for this tax duplication, the County is required by law to rebate municipalities for the amount that city residents pay for services the County does not provide to them.

In Takoma Park, these services include road maintenance, crossing guards, parks, and our police department. You can read about tax duplication in more detail here and in our resolution here.

We have three asks:

• That the Council amend the County Executive’s FY22 budget to adjust the municipal tax duplication payments to the amount for Transportation (road maintenance), Police, Crossing Guard, and Park services to reflect the amounts owed to municipalities in Montgomery County, which would total $14,203,314;
• That the Council work to codify a consistent process and method to update the formulas for these categories, and
• That the Council urges the County Executive to begin negotiations on the formula for police and park maintenance services for the FY23 budget year.

During the 2008-09 Great Recession, the County froze the rebate at its current level due to a lack of revenue. Revenues have since recovered. However, the tax duplication rebate has remained frozen at 2012 levels, even as the County has increased what it spends to deliver services to County residents who do not reside in Takoma Park and the cost of providing services such as road maintenance has increased since 2012.

Residents of Takoma Park and other municipalities have been paying their cities for services they receive and also have been forced to pay the County for services it does not provide. If the rebate had not been frozen in 2018, the City of Takoma Park would have received an additional $900,000 as part of our rebate in that year alone. Although only a drop in the bucket for the County budget, this figure amounts to 3.77 cents on our tax rate. It would make a big difference for our tight budget, increasing the City’s ability to maintain our roads and parks, reduce property taxes for those struggling financially, work to make housing more affordable, and provide other services.

The County Executive and Council have neglected to address this inequity for years. The Montgomery County chapter of the Maryland Municipal League, Takoma Park City Manager Suzanne Ludlow, members of the Takoma Park City Council, and I have all asked repeatedly that Takoma Park receive its fair share.

As the budget season begins, we must take the opportunity to continue and build on those efforts. County Executive Elrich included in his proposed FY22 budget an increase to the rebates, but not one that matches the County formulas for calculating how much cities are owed.

We will continue our efforts and I believe we will succeed if our residents join the call for tax justice. I encourage you to call or email the County Council and tell them to pay municipalities in full. Now is not the time to be short-changing cities, as we have been and continue to be on the front line in the fight against the pandemic, economic hardship, and racial inequity. Please call or email now and over the next couple of weeks as the County Council considers the County budget.

Here are some points to highlight:

• The County Council should recognize the benefits of having its municipalities provide services that the County would otherwise have to provide.
• The failure of the County to increase rebates to municipalities to provide such services since 2008 is an injustice that the Council should correct.
• The FY22 budget should provide the $14 million for municipal tax duplication payments to Montgomery County municipalities for Transportation (road maintenance), Police, Crossing Guard, and Park services.
• The Council should begin negotiations with Takoma Park and other municipal leaders regarding the FY23 budget and codify a consistent process and method to update the reimbursement formulas.

To sign up and testify on the County budget on April 6^th or 7^th go here.

Email addresses for the County Council:

Council President Tom Hucker – Councilmember.Hucker@montgomerycountymd.gov

Council Vice-President Gabe Albornoz – Councilmember.Albornoz@montgomerycountymd.gov

Councilmember At-Large Evan Glass – Councilmember.Glass@montgomerycountymd.gov

Councilmember At-Large Will Jawando – Councilmember.Jawando@montgomerycountymd.gov

Councilmember At-Large Hans Riemer – Councilmember.Riemer@montgomerycountymd.gov