[RP TownTalk] State of Maryland Property Tax Assessment

[Jonathan W. Ebbeler]

Mr. Holmes -

 

The point you bring up is well worth exploring.  I remember a similar
question was asked when I ran for office almost two years ago.  I believe
the Gazette and others phrased it to ask something on the lines of "given
the number of foreclosures and declining property values what services would
I propose cutting in town?"  When one watches the news and looks at
macroeconomic data such as property tax assessments, unemployment rates,
foreclosure rates etc., there is a natural tendency to make conclusions that
are not necessarily factually based.

 

The premise of the question concerning declining property assessments
potentiating future increases in property tax rates assumes in economics
what is called 'ceteris paribus' (a Latin phrase which roughly translates to
mean 'all things held equal or constant').  That is, if the towns services
in 2009 cost X and this was roughly offset by revenues that were equal in
the same year and cost Y, then the same logical extension could be applied
in following years.  So in 2013, town services still cost X but the revenues
collected are only .55*Y (i.e. a 45%  reduction).  To have a balanced budget
services would either have to be reduced 45% as well or else the taxes
(revenue) that people pay would have to be increased to balance the cost of
services (or some mix of the two policy choices).  

 

So in this case, contemplating future expenditures such as a Community Wing
(although the town has an existing state grant for a portion of it and on
Monday will be requesting additional monies), real estate acquisition etc.
would all seem to be incredibly foolhardy.  Fortunately for the town of
Riverdale Park economies are not constant throughout time and 'ceteris
paribus' does not apply.  To understand our town you have to look at the
economy from a micro, not macro, level.  For example, take the adopted
revenues over the last three years:

-2009/2010:  $3,097,415

-2010/2011:  $3,426,207

-2012/2013:  $3,666,560  

 

In the Riverdale Park example the revenues  actually increased ~18.4%  over
the last three years.

 

Last year, Riverdale Park experienced the largest year-to-year increases in
sales prices on real estate (something in the neighborhood of 27%) in the
state of Maryland.  The foreclosure rate in Riverdale Park proper (over 50%
of the residents in 20737 are in unincorporated Prince George's County) is
significantly lower than national, state, county, and other local levels.
The other more significant part of this is that the town  in residential
real estate, office, and commercial retail establishments is growing, not
contracting, and certainly not staying at identical levels.  

 

To understand why Riverdale Park is expanding and not contracting you have
to look at the town itself and its experience and characteristics, not just
apply national or state-level economic factors:

-expanding tax base residentially in all time horizons (Madison Street
townhomes from the EYA project, small subdivision off Lafayette, and of
course the Cafritz development)

-expanding office base (Cafritz, M-Square on River Road including the newly
opened up NOAA building)

-expanding commercial base (Town Center Market, Douglas Development holdings
at town center, Route 1 Corridor, Kenilworth, and of course Cafritz)

 

In terms of lawsuits, I will only say that we live in a country where anyone
with a few dollars can file a complaint and ask for any amount of money.
That does not mean municipal leadership should ignore the risks, but a town
cannot be held hostage by the real or imagined grievances filed in the legal
system.  Please keep in mind that the town actually faced two lawsuits on
speed cameras, the Town received judgment on one of them less than two
months ago.  These cases are filed all the time but the case law has been
consistently upheld to date.

 

I firmly believe that town leadership has an obligation to the citizens to
ensure good governance, but part of that governance is taking in all the
nuances and making informed and rational choices to potentiate a firm
financial foundation for the town today, next year, and in the future.  I
hope this answers the questions you had.

 

Respectfully,

 

Jonathan

 

Jonathan W. Ebbeler

4711 Oliver Street

Councilman - Ward 1

Chairman - Economic Development Committee

 

 

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