Jun. 1—Thurmont's property tax rate is set to rise for the first time in three years after the town's commissioners voted 4-1 on Tuesday to approve a 7% increase.
Under the town's fiscal year 2023 budget — which the commissioners also approved 4-1 Tuesday — the tax rate will increase from 29.92 cents per $100 of assessed value to 32.06 cents.
During two meetings last month, Mayor John Kinnaird and the commissioners said the increase was undesirable, but necessary because of rising inflation.
Prices were 8.3% higher in April than a year earlier, the U.S. Labor Department said in its monthly report on the Consumer Price Index published last month.
But Commissioner Bill Blakeslee, the sole opposing vote Tuesday night to both motions, maintained his stance against increasing taxes.
As he did last week, Blakeslee argued that the town should apply fees it expects from incoming developments to its $4.8 million budget.
"I think we owe it to the citizens not to raise the taxes as much in this inflationary period," he said.
Thurmont could be reasonably certain the developments in progress will have sold at least 20 houses by the end of next June, he said.
Chief Financial Officer Linda Joyce has said it would be against accounting best practices to add projected fees to the budget before they materialize.
Developers must pay municipalities impact fees to cover all or part of the costs of providing public services to new residences. But Thurmont won't get this money until houses are sold, Joyce has said.
Kinnaird, Commissioner Wayne Hooper and Commissioner Wes Hamrick on Tuesday repeated why they were hesitant to rely on this funding.
Hooper expressed wariness about spending money the town doesn't already have. And Hamrick said properties may not fill up as fast as the developers are anticipating.
Kinnaird said it's been hard to find qualified employees for the town's police force.
Thurmont has had to raise wages to retain and recruit employees. And the town can only spend impact fees on parks and roads — it couldn't pull from this fund to provide bonuses or pay salaries, he said.
Former Thurmont Commissioner and Mayor Marty Burns added his voice to Blakeslee's objections during a public comment period.
"I think there's other avenues at your disposal that can meet the same intent without hurting and putting the full burden on the taxpayers, who also are going through this economic downturn," he said.
The cost of health care has gone up 9%, according to Joyce. But Burns said the town shouldn't expect taxpayers to pick up the full amount; town employees should help pay it.
The town could use American Recovery Plan Act money to give one-time bonuses to its staff, Burns said. And it should have money to spare during the upcoming fiscal year, after paying off the cost of its police headquarters this fiscal year.
He pointed to the town's unrestricted fund balance as a source of money for this fiscal year.
Thurmont maintains this fund to meet cash-flow requirements and continue providing services during times of revenue shortfalls and unanticipated expenses, Joyce said.
As of June of last year, the town's unrestricted fund balance stood at roughly $1.3 million.
It's valuable to have this money in case of emergencies, Kinnaird said. He recalled when the town had to spend $52,000 to repair a water line during his first month as mayor.
"This is a tough year, but we have to make tough decisions sometimes," he said. "And this is certainly one of them."
Blakeslee remained opposed to the tax increase. Like Burns, he also pointed to the amount in the town's fund balance.
"That's a lot of money and here we are raising the taxes," he said. "I just don't think it's right."
Follow Angela Roberts on Twitter: @24_angier