Submitted by: Ron Brooks
Submitting Department: Finance
Agenda Section: Discussion
Item Title:
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City of Hyattsville Property Tax Relief Programs: Administrative Recommendations
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Suggested Action:
recommendation
For Discussion.
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Summary Background:
The City of Hyattsville issued a Request for Proposal (RFP) for a consultant to study the City’s current Homeowner’s Property Tax Credit Program and the Homestead Property Tax Program. The City’s objective was to determine if modifications needed to be made and the impact to the City and homeowners. The scope of the project included a review of the current Homeowner’s Property Tax Credit Program and the Homestead Property Tax Program, and identification of other effective tools that, in the aggregate, may help to provide financial relief from the year-over-year increases that impact low and fixed-income homeowners. The administration received multiple proposals and, with Council approval, awarded a contract to PFM Group Consulting LLC to facilitate the reviews.
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. This has created financial hardship for homeowners in low and fixed-income situations.
Following the study, the consultant provided a final report with recommendations to improve these programs and/or provide other alternatives to the City’s property tax credit relief programs.
Recommendations
The Treasurer recommends adjusting the requirements to qualify for the City’s property tax credit program’s as follows:
Homestead Property Tax Program
Reduce the local Homestead Property Tax Program assessment cap from 10 percent down to 5%, which will provide a larger tax credit back to the homeowner.
Homeowners Property Tax Program
Adjust the Homeowners Property Tax Credit Program requirements by increasing the home assessed value limit from $350,000 to $415,000, increase the combined net worth limit from $200,000 to $400,000, and increase the combined gross income limit from $80,000 to $90,000, which will result in more homeowners qualifying.
These new limits and requirements will be subject to administrative review every three years.
Next Steps:
Pending Council approval, the City Attorney will draft the ordinance. City Ordinances require two readings.
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 $500k and $650k annually.
City Administrator Comments:
For discussion. If the recommendations are approved, the Treasurer will address funding offsets to adjust for anticipated loss of General Fund Real Property Tax Revenues.
Community Engagement:
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Strategic Goals:
Goal 4 - Foster Excellence in all City Operations
Legal Review Required?
Pending