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Commissioners hold homestead tax-cap at 3% for now; energy tax change kept under review
Summary
Commissioners gave staff direction to keep the homestead assessment cap at 3% for the FY26 budget cycle and discussed separately whether to reduce the local energy tax to zero, but deferred a final decision until budget adoption.
St. Mary's County commissioners on March 4 declined to lower the county’s homestead property tax assessment cap from 3% for the upcoming budget, directing staff to leave the cap unchanged in the recommended budget.
CFO Vanetta Van Cleef presented refined analyses of smaller percentage changes and said staff had included multiple scenarios (2.0%, 2.5%, 2.75%) for commissioner consideration. At the meeting one commissioner said, “I’m not ready to adjust the homestead tax credit,” and another responded, “I mean, I'd like to, but I just don't know. So I would say it sticks at 3%.” The board recorded informal assent.
Why it matters: The homestead assessment cap affects how fast taxable assessments can grow for owner-occupied residences and has a direct, quantifiable effect on county revenue; staff said the cap must be set by a statutory deadline and that retaining the current 3% keeps near-term revenue estimates stable.
On the county energy tax, commissioners reviewed the history. Staff noted the county reduced the rate from 1.25% to 0.3125% on July 1, 2023, and projected roughly $300,000 in revenue at the lower rate versus budgeted amounts. Several commissioners favored “zeroing it out” (setting the energy tax rate to 0.0%) but agreed to wait and finalize any change as part of the final budget process because the overall revenue outlook remains uncertain.
Ending: Commissioners instructed staff to keep the homestead-cap at 3% in the recommended budget and to include energy-tax options for further consideration before the June 1 adoption deadline.
