St. Mary’s County officials say revenues exceed expenses by about $2 million as they debate impact fees and cutting the energy tax

St. Mary's County Chief Financial Officer Jeanette Cudmore told the Board of County Commissioners that the county's current multi‑year budget shows revenues exceeding expenses by about $2,000,000 after removing a one‑time lease payment tied to the 2012 lease and 9‑1‑1 center equipment.

The difference comes after staff removed the final payment of a large 2012 lease, Cudmore said: “The last payment, which is about 2,200,000, is in this year, FY17. So we won't need that $2,200,000 payment in 18. So that was actually removed. So right now, our revenues are exceeding our expenses by $2,000,000.”

Why it matters: commissioners used the updated cushion as the basis for several policy choices they must make before the recommended budget: whether to raise impact fees (charged to new development for schools, roads and parks), whether to eliminate the local energy tax (estimated at up to $1.3 million in FY18), and whether to adjust the transfer‑tax exemption for first‑time homebuyers.

Impact fees and transfer tax. Commissioners compared St. Mary's to neighboring counties, noting Calvert County has a much higher impact fee and no local transfer tax. Cudmore presented the staff calculations used to generate the county’s current $45,100 impact‑fee schedule and a recalculated “cost‑based” fee of roughly $26,377 per unit. Commissioners asked staff to prepare two side‑by‑side scenarios (new‑home buyer total cost including impact fees, transfer taxes and connection fees) comparing St. Mary’s, Calvert and Charles counties so the board can judge competitiveness before any decision.

Energy tax. Several commissioners urged modeling the FY18 budget without the 1.25 percent local energy tax so they could see the impact of removing that revenue stream. Cudmore said the adopted FY17 energy tax budget was $1.3 million; commissioners discussed that collections vary with fuel prices and that actual receipts in FY16 were smaller. One commissioner asked staff to present the budget both with the energy tax and with that revenue removed so the board could “work the budget like we don't have the people's money.”

First‑time homebuyer exemption. Commissioners also discussed raising the exempted amount used in the transfer‑tax computation for first‑time homebuyers from $30,000 to $50,000 (staff estimated that change would reduce transfer‑tax receipts by roughly $225,000). Several commissioners said any change to impact fees should be considered together with a transfer‑tax exemption for first‑time buyers to avoid deterring entry into home ownership.

What’s next: Cudmore told the board that department budget submissions arrive in early February and the Board will begin formal requests and review sessions later in the month and in March. Commissioners asked staff to prepare pro forma budget views that show the effect of (a) removing the energy tax and (b) raising impact fees while also calculating the effect on CIP borrowing and transfer‑tax receipts.

Ending: The board did not vote on any of the tax or fee changes during the work session; members directed staff to return comparative analyses, updated constant‑yield and revenue estimates, and side‑by‑side scenarios for commissioners to review during the recommended‑budget process.