Submitted by: Ron Brooks
Submitting Department: Finance
Agenda Section: Presentation
Item Title:
title
Study of City of Hyattsville Property Tax Relief Programs: PFM Group Consulting
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Suggested Action:
recommendation
For presentation and Council discussion.
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Summary Background:
Since 2010, the City has experienced significant population growth and commercial revitalization. The success of the community has been intentional and attributable to a variety of factors including the City’s focus on reinvestment in public infrastructure, prioritization of walkable transit-oriented development, high quality public services, and proximity to Washington D.C. With a raised profile, the City’s efforts are now focused on addressing the challenges that come with being a successful destination community.
Subsequently, with the significant development of new homes in the City, this has also created rising property values across the region, thus higher property tax for local homeowners. While the City’s property tax rate has not been raised in over a decade, the amount of property taxes paid by homeowners has increased and will reasonably continue to increase annually with rising home values in the City of Hyattsville. Notably, this reality has caused a significant financial hardship for homeowners that are now in low and fixed-incomes situations and are struggling to pay the annual increases of their property tax liabilities.
In the fall of 2022, the City of Hyattsville issued a Request for Proposal (RFP) to study the City’s current Homeowner’s Property Tax Credit Program and the Homestead Property Tax Program. The City’s objective was to seek a consultant to review the City’s current Homeowner’s Property Tax Credit Program and the Homestead Property Tax Program, including identifying other effective tools that in the aggregate will help to provide financial relief from these year-over-year increases that now impact low and fixed-income homeowners.
The City received multiple proposals and the administration selected and Council approved the award to PFM Group Consulting LLC to facilitate this review of both homeowner tax credit programs. Concluding the study period, the consultant will provide a final report with recommendations to improve these programs and/or provide other alternatives to the City’s property tax credit relief programs. The final report will also include identifying other effective tools that in the aggregate will help provide financial relief from year-over-year increases in property tax payment liabilities that now impact low and fixed-income homeowners.
Next Steps:
After presenting the findings and recommendations at the October 16th City Council meeting, final recommendations will be presented to Council in November 2023.
Fiscal Impact:
As a result of adding new tax credit programs and adjusting current programs, the anticipated loss in General Fund Real Property Tax Revenues is estimated to be between $350k and $450k annually.
City Administrator Comments:
The staff will identify funding offsets to accommodate the tax program adjustments and the anticipated loss of General Fund Real Property Tax Revenues.
Community Engagement:
A public hearing may be required.
Strategic Goals:
Goal 4 - Foster Excellence in all City Operations
Legal Review Required?
N/A