MEMORANDUM

TO: City Council

FROM: David J. Deutsch
City Manager

SUBJECT: Status Report/Council Poll

DATE: December 13, 2007

Status Report

1. FY2009 Municipal Tax Differential Update
The Tax Differential Program is an annual process for determining the appropriate property tax rates for residents of municipalities within Prince George’s County. It is used to reduce the County government portion of the property tax bill to account for services that are provided instead by the municipal government.

Prince George’s County recently notified the City that the calculated tax differential for FY2009 is 12.62 cents, as compared to 1.37 cents for FY2008. This significant increase in the calculated tax differential rate is attributed to police services that are now provided by the City rather than by the County.

The actual tax differential rate used to reduce the County portion of the property tax bill will be determined by averaging the FY2009 calculated tax differential rate with the rates calculated for the previous two years. Staff estimates that the applied tax differential rate used to calculate the FY2009 property tax bills, which will be mailed around July 1, 2008, will be approximately 5 cents. For example, the County portion of a resident’s property tax bill will be reduced by $150 next year on a home assessed at $300,000. This compares to a $41.10 reduction in the current year.

The tax differential rate will continue to increase over the next several years due to the averaging aspect of the tax differential program, resulting in a reduced County property tax rate applied to Bowie property owners in the future.

2. Speed Monitoring Bills
In 2005, the General Assembly approved the implementation of a speed monitoring program for Montgomery County. The County must report back to the General Assembly in 2009 on the success of the program. Local officials would like to expand the law to apply to Prince George's County. Three local bills regarding the implementation of speed cameras are under consideration in the County Delegation.

Two of the bills introduced in the County Delegation contain exactly the same language as the Montgomery County law, differing only in their sponsors. Delegate Ramirez sponsored PG 316, and at the request of the Prince George's County Council, the Prince George's Delegation Chair sponsored PG 324. The third bill on the subject is sponsored by Delegate Ross and Senator Pinsky and is the one most friendly to municipalities.

Each of the bills allows for speed monitoring systems on residential highways and in school zones in the County. Violators exceeding the speed limit by at least 10 miles per hour are subject to a civil penalty of up to $40. The bills differ in which agency receives the revenue from the fines. PG 316 and 324 designate that payment of fines go to Prince George's County. PG 312 specifies that if a municipal government has a speed monitoring program implemented by the municipal police department, or by contract officers under the direction of a municipality, the revenue from the citations will go to the municipality. It also requires the municipality to be consulted in the formulation of the procedures for issuance of citations.

Since the 2008 General Assembly Session does not begin until January 9, 2008, this item can be added as a solo item to the January 7 agenda, or as part of a broader legislative item, if there are other issues that need to be addressed.