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Consultants tell Takoma Park council tax rate pressure tied to narrow revenue base; offer options including solid-waste fees and asset leasing
Summary
Raptellus consultants told the council the city's property tax rate (55.22) is the highest in Montgomery County because the tax burden falls on single-family homeowners; they presented revenue options (annexation, solid-waste fees, asset leasing) and forecast scenarios showing reserves could be drawn down absent changes.
Raptellus consultants presented a two-part financial sustainability briefing to the Takoma Park City Council, outlining why the city's property tax rate — 55.22 cents per $100 of assessed value — sits at the top of Montgomery County and what policy options could relieve pressure on single-family homeowners.
"The city has a unique distribution of assessed parcels whereby the largest burden for property tax revenue falls on single family homeowners," the consultants said, noting detached and attached single-family homes comprise about 50% of units but contribute roughly 77% of real property tax revenue. They added that Takoma Park's small geographic footprint (about 2.1 square miles) and limited commercial tax base constrain options to spread costs across a broader population.
The revenue survey presented several options used by peer communities in Maryland and beyond: economic development and, where feasible, targeted annexation to grow the tax base; converting solid-waste collection to an enterprise fee rather than funding it from general property taxes; greater grant-seeking; asset leasing (parking lot management, event venues, rooftop solar leases); and fee adjustments and indexing. Some nationwide ideas (local option sales taxes, temporary income taxes) are not currently available to Maryland municipalities without state authorization.
On multi-year forecasts, the consultants presented scenarios at the current tax rate and at modestly reduced rates. At the status-quo rate their model shows cash outpacing cash in over several years but reserves remaining above the council's 17% target until about 2031 under conservative assumptions. If the rate is lowered and no other actions are taken, the forecast showed reserves approaching the minimum sooner and projected that an out-year rate increase might be required to restore reserve margins (one example cited was an estimated 8-cent increase around 2030 under the model's assumptions).
Council members asked for refinements (for example, modelling a constant-yield rate plus an employment-cost index for personnel), and staff and consultants agreed to run additional scenarios and provide comparisons with other municipalities that have used particular revenue tools.
The presentation concluded with staff offering next steps: additional scenario runs, deeper peer benchmarking on specific revenue tools (annexation examples, solid-waste enterprise funds, asset-leasing case studies), and continued coordination with the council during budget planning.
