Caroline County commissioners propose 2¢ property tax cut as budget faces grant losses and big capital costs

Caroline County Finance Director Daniel Fox told commissioners and the public on May 5 that property taxes account for roughly 44% of the county's general fund revenue and that commissioners are proposing a 2-cent reduction in the property tax rate, from $0.98 to $0.96 per $100 of assessed value.

The proposal was presented during the first of three advertised public hearings on the proposed FY2027 operating and capital budgets. Fox said the county projects income tax revenue will remain at 3.2% and described other revenue sources, including licenses, permits and state and federal grants.

"Property taxes being the largest, that this year, it looks to be about 44% of our projected income," Finance Director Daniel Fox said. He also summarized several grant reductions that will press the county's bottom line: the federal EMPG grant (emergency management personnel funding) is projected at zero for FY27; a state teacher retirement supplement will drop by about $342,000 (and be eliminated in FY27); and the statewide police accountability board (PAB) implementation grant that previously provided a reduced award ($55,000 for the county) will end for FY27.

Why it matters: commissioners said they are trying to offset assessment-driven increases in individual tax bills while keeping essential services and funding major capital projects. The county began the budget process with about $1.5 million more in requests than projected revenue and must cut or reallocate funding to reach a balanced operating budget.

The budget includes several specific proposals and commitments. On the operating side, the recommended spending plan funds the next phase of an employee step plan that includes a 2% cost-of-living adjustment and maintains existing employee benefit shares. The local share for the board of education and Chesapeake College's required contribution are fully funded, and the county also accounts for a new obligation to fund a library state retirement plan.

On the capital side, Fox said the proposed plan sets aside approximately $22,500,000 for road repairs and overlays, about $1,700,000 for the next phase of the countywide radio-replacement program, roughly $861,000 for equipment replacement across county departments, and approximately $3,400,000 toward the next phase of Lockerman Middle School.

"We have just over $382,000 going into county building upkeep and repairs," Fox said while walking commissioners through the white CIP handout provided to attendees.

Commissioners discussed the tradeoffs. The presiding commissioner (Chair) said reducing the rate is intended to give residents some relief from higher assessments but acknowledged the cost of the cut: "By reducing the 2¢ on the property tax rate, we're losing 700 plus thousand dollars in revenue," the Chair said, noting the county must offset that loss through cuts or other adjustments.

Commissioner Bartz and others noted large, ongoing capital obligations'including the Lockerman Middle School project and a planned detention center'that continue to influence long-term budgets. Commissioners also highlighted a newly implemented volunteer firefighter property-tax credit designed to aid recruitment and retention: an initial $250 credit this year that phases up by $50 increments to $500 over five years.

Public input at the hearing was limited. A representative identified as Dr. Coppersmith spoke in support of Chesapeake College projects, thanking the county for backing the Queen Anne Tech building and describing it as a "generational resource for skilled trades construction." George Carris of the Carolina Academy Council of Arts offered brief remarks and thanks.

Procedural outcomes: with no substantive opposing testimony, commissioners moved and approved motions to close the FY2027 operating and capital budget hearing, convene and suspend the second hearing on the proposed real property tax rate (no speakers signed up), and convene and suspend the third hearing on municipal real property tax differential rates. Director Fox read the proposed differentials for the five towns (Denton 6¢, Fettlesburg 8¢, Greensboro 6¢, Preston 1¢, Ridgely 5¢) and said holding those differentials would generate about $723,418 in revenue under the proposed structure.

What comes next: the hearings were suspended at the May 5 meeting with no formal votes on final tax rates recorded that evening. Commissioners thanked county finance staff for their work and adjourned; any final decisions on the FY2027 budget, tax rate and differentials will follow the county's statutory schedule for adoption and public notice.

Sources: remarks and budget presentation by Daniel Fox, finance director; public comments by Dr. Coppersmith and George Carris; hearing notice read by Attorney Stuart Barrell.