Carroll Commissioners Receive Fiscal Year End Budget Projections Update
Ted Zaleski, Carroll County’s Director of Management and Budget, provided an in-depth briefing on the current state of county finances for the second quarter of fiscal 2024 during the county commissioners’ weekly meeting. As the fiscal period progresses, the commissioners and county officials are assessing the effectiveness of their financial strategies, especially in light of uncertainties that could impact revenue streams.
For fiscal 2024, which concludes on June 30, the Carroll commissioners adopted an operating budget of $542.8 million last May, maintaining the property tax rate at $1.018 per $100 of assessed value. It is estimated that property taxes will contribute $250.6 million to this year’s revenues. The primary funding sources for the county’s operating budget include 45% from property tax revenue, 38% from income taxes, and 3% from recordation taxes, alongside additional revenues from building permits, service fees, and investment income.
“The revenue side, particularly property tax, is anticipated to align closely with our budget projections, which is usually the case,” Zaleski remarked. However, the income tax revenue stream presents a significant uncertainty. The budget initially predicted income tax revenues would hit $223 million, yet current estimates suggest a potential shortfall of about $2.5 million. Zaleski expressed his concern over the unpredictability of these figures, indicating that the final outcome remains uncertain.
Another area of concern highlighted by Zaleski is the revenue from recordation taxes, which might fall below expectations due to the housing market’s recent performance. Recordation tax, a state-imposed fee for the registration of property sales or purchases, has been affected by the decreasing number of home sales. For instance, a property purchased at $300,000 is subjected to a $3,000 recordation tax at the current rate. In a move reflecting sensitivities towards affordability for groups such as teachers, firefighters, and police, commissioners last year opted against raising the recordation tax rate to bolster the fiscal 2024 budget.
To offset the financial impact of maintaining the recordation tax rate, the commissioners decided to retain $3.875 million in surplus funds within the general fund, rather than transferring it to the capital fund budget. This decision helped to lower the operating budget from an initially proposed $546.7 million to $542.8 million.
Recent real estate data indicate a 3.8% decrease in home sales across Maryland in January, with Carroll County selling 95 homes as opposed to 93 during the same period last year. However, the county faces a declining inventory of available homes, with 159 homes listed in January 2024, down from 203 in January 2023. District 3 Commissioner Tom Gordon III emphasized that this housing shortage is a widespread issue, affecting local, state, and national markets alike.
Simultaneously, Carroll County experienced a significant 13.9% increase in average housing prices, rising from $399,372 in January 2023, to $454,695 in the following year. This trend underscores the evolving dynamics of the local real estate market amidst broader economic factors.
As fiscal 2024 progresses, the Carroll County commissioners continue to navigate the complex landscape of public finance, balancing budgetary commitments against the backdrop of fluctuating revenues and the ongoing challenges in the housing sector.
