Updated: Jan 11, 2020
"We can't do it," says Commissioner Larry Tichnell who goes on to ask the public to help him and his fellow commissioner with the economic challenges that lay ahead for Garrett County.
"But as a group," he continues, "Maybe we can get something done."
What he's most concerned about is the financial demands of the Kirwan Commission Report that will require Garrett County to spend $1.4 million annually over the next ten years on public schools if the legislation passes through the 2020 General Assembly in Annapolis.
Commissioner Tichnell's plea was to a full house at their "State of the County" meeting held on Monday, January 6. Members of the community, the Garrett County School Board, and community organizations were present.
"Garrett County can't afford more taxes," Tichnell laments. "The people of Garrett County can't afford more taxes."
Tichnell and his fellow commissioners, Paul Edwards and Jim Hinebaugh faced a $4 million shortfall with their 2020 budget requiring a tax increase to balance the books, going against their principals. Although the increase was minimal, it came as a surprise to residents of the remote part of Maryland who haven't seen a tax increase in close to 20 years.
Commissioner Edwards pointed out that the Kirwan Report included many recommendations that were good for public schools with ideas he liked, however, the cost has him highly concerned. He also noted that some of the recommendations in the report were already funded locally such as pre-K programs and vocational training in the high schools. The roughly 1,000 page report outlines a litany of recommendations that include increases to teacher salaries (roughly a 30 percent increase locally for new teachers), universal pre-K, high school vocational training, and new assistant staff and student special needs services. There is also a component for oversight to ensure the funding is being spent as intended and producing the intended results.
Commissioner Hinebaugh took the helm to outline the Kirwan Commission Report. With ample apprehension of its financial feasibility for Garrett County, he worries the cost as proposed will crush the county's annual budget.
"You can't come up with $4 billion without some increase in taxes," Hinebaugh points out referring to the entire state's commitment, should the Kirwan Report pass. Of that $4 billion, each county will be mandated to come up with school funding increases to meet the proposed plan, some of which is contributed by the state.
At the heart of the Kirwan Commission is the goal of correcting a backslide in Maryland test scores that have tumbled from first or second, to fourth or fifth on a nationwide scale. While English proficiency rose by 2 percentage points to 43.7 percent, math scores fell or stayed flat at every level of elementary and middle schools, according to state education data reported by the Baltimore Sun. Overall, only a third of students in grades three through eight passed the Partnership for Assessment of Readiness for College and Career math tests, a drop of 1 percentage point. It’s the state’s worst math performance since 2015, the first year the test was administered. The bad report card has state education professionals concerned that if not corrected, Maryland could lose its status as a place for first-rate public education.
The mandated increases would vary from county to county based on what is called the "Wealth Formula" which calculates a county's ability to pay based on real estate tax revenue. The formula places Garrett County among the top five wealthiest counties due to the high-valued real estate within the Deep Creek Lake watershed, many of which are part-time or vacation residences. What the commissioners realize is if the median income were used, and what they feel is a better gauge of the county's overall wealth, Garrett County would rank near the bottom in Maryland. A lower ranking would mean the state would chip in a larger share of the increased school funding with less out-of-pocket for the county. An early estimate shows that a wealth formula correction could mean Garrett County would need to spend just $750,000 on education annually, roughly half of what the current formula would require in regards to the Kirwan Report.
"If we did that the way it's proposed, we [Garrett County] would have to increase property taxes by 24 percent or 25 cents," said Hinebaugh who then recalled the recent property tax increase of 6 cents to cover the 2020 budget shortfall.
"We're not against spending on education," said Commissioner Hinebaugh. "I don't want to create that perception, and we're not for funding our public school, when we are."
Commissioner Edwards felt confident the proposed school funding increase would pass the General Assembly in 2020 but he wasn't sure what form it would take. Often times pie-in-the-sky legislation with high fiscal notes are whittled down or phased in to allow county's to adjust their budgets over time, reducing sticker shock and economic chaos.
Hinebaugh noted that there are several ways beyond property taxes to raise revenue suggesting the county could increase the income tax or apply some fees or some other taxes.
Maryland State Senator Ben Cardin and Congressman David Trone recently introduced a new bill called the “TRUE EQUITY Act”. In Maryland, these new federal grants would cover a significant portion of the costs to implement the Kirwan Commission recommendations.
The wind farms on the county's ridges, for example, are depreciating over time and bringing in less revenue each year. Although Deep Creek Lake is the golden goose (generating about 6o percent of the tax revenue) the lopsided economic picture is vulnerable to trends, habits, discretionary dollars, and other aspects that have driven a successful tourism environment.
"The bottom line is, based on the assumptions for the next 10 years, we will accumulate an additional $5 million in [new] revenue," Hinebaugh illustrates with a chart overview of revenue and expenditures. An amount he says doesn't meet the new demands of the Kirwan Report. Hinebaugh also noted that the tax increases to fill the revenue gap could be significant in some case which he fears could drive down interest in lake home ownership and eventually property values.
"If we did everything that's proposed and raised the taxes 11.5 percent to support it, I would predict we would pretty much kill the Deep Creek Lake real estate market," he said. "People are not going to pay an additional 3, 4, or 5 thousand dollars in real estate taxes."
Those in attendance were reminded that although there are concerns for the future, some good economic movement is in the works regarding infrastructure improvements. Commissioner Edwards outlined a laundry list of upgrades and new projects that include an access road and water storage and treatment facility at the Keyser's Ridge Industrial Park, a new building with part-occupancy at the McHenry Business Park, new workforce housing in Granstville, airport expansion, improvements to 219 North, a new Emergency Operations Center, and a new Performing Arts Center at Garrett College. Until now, Commissioner Edwards pointed out, the last two items that were absent finally make Garrett County on par with every other county in the state.
As part of infrastructure improvements, broadband plays an important role for both residents and businesses. Expansion efforts are improving the footprint of coverage with hopes of negotiating additional service providers in the near future. Broadband access and speed has been a major hurdle for the county due to the great distances between structures and limited interest from internet service providers who concentrate their energy on more populated areas. The customer base is small for the area of coverage in square miles which reduces competition on plans and pricing.
With all the uncertainty facing Garrett County and its commission, the underlying tone in the State of the County meeting was the time has come to work together and roll up some sleeves. Commissioner Tichnell recognizes the limitations of he and his fellow elected officials without calling on the residents who have a vested interest. The commissioners plan to hold public brainstorming sessions to draw out ideas for growing the economy and building a network where all factions are working towards the same goal of building a stable, sustainable economy.