July 14, 2024
Annapolis, US 89 F

Annapolis Increases Taxes

UPDATE: We corrected the tax increase to 5.66%. The original 3% was a mis-read on our part.

After a contentious meeting at City Hall on Monday, Annapolis Mayor, Joshua Cohen is now calling for significant tax increases and a reduction in spending in his proposed budget.

Approximately 300 citizens attended Monday’s meeting wearing red shirts to send a signal to the Council that the City is swimming in debt. The Annapolis Sound has some excellent video coverage of the meeting. In addition, the City’s Financial Advisory Commission presented their report which essentially told the City that they could not fiscally survive on the proposed budget.

The commission has recommended that the City Council use an equal percentage of spending reductions and property tax increases to address the City’s current and impending financial challenges. The commission estimates this amount to range between approximately $6.5 million and $7.76 million dollars.

–Annapolis Financial Planning Commission Report

Annapolis has been plagued by fiscal “irregularities” over the past year. Last year, $150,000 was stolen from the Finance Department’s office, the City ran out of cash to meet obligations and required a one time loan that has now turned into an annual event. And most recently, Finance Director Bruce Miller and City Manager Mike Mallinoff announced that they were unaware of approximately $4 million in additional debt the City owes prior to June 30, 2011.

The Mayor campaigned on a platform of not raising taxes and it now appears that he may be following in the footsteps of George HW Bush.  Mayor Cohen has also resisted cutting staff or spending for the bloated City. While he did lay off a few employees last year, most were hired back and the employee count (according to City Hall testimony on Monday) now exceeds 700 people.

During today’s press conference (video) the mayor announced a 3% 5.66% tax increase along with $2.8 million in cuts to his proposed budget  Most of the cuts come from salaries and are across all departments. However, these are either vacant positions or positions created under the original proposed budget. The Mayor stressed that no current employee would lose their job.

In terms of hard spending cuts, some departments will see cuts in contract labor. Additionally the City will save $100,000 by consolidating fleet maintenance on their vehicles.

Mayor Cohen also announced that a proposed trash fee was being tabled for further investigation and potential savings and that Alderman Pfeiffer was taking a leave of absence from the Finance Committee and will be replaced by Alderman Arnett. The Mayor also addressed the unanticipated $4 million expenses that are due and said that it was “unacceptable” yet lauded the Finance Department for their hard work in migrating the system to current standards.

While the proposed revisions are a step in the right direction, on paper, they do not seem to be enough. The Financial Advisory Committee projected a deficit in excess of $7 million, yet these changes (cuts and tax increases) only account for $4.7 of it. Alderman Ross Arnett agreed that this was a start and not the end.

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