FY 25 Harford County Approved Operating Budget

HARFORD COUNTY MARYLAND FISCAL YEAR 2025 BUDGET SUMMARY

Property Tax revenue estimates are based on a thorough analysis of lien sheet activity, deed activity, building permit data, residential sales, Transfer Tax transaction data, and Maryland State Department of Assessments and Taxation Distribution Tracking Information. Maryland State law provides that all property is subject to the property tax. Properties are reassessed by law once every three years, and property owners are notified by the Maryland State Department of Assessments and Taxation of any change in their assessment. Properties are required to be assessed at their current market value so that each property owner pays their fair share of local property taxes. In FY 25, the County is maintaining a tax rate of $0.8413. The State reassesses all properties on a triennial basis. Statewide "Group 3" reassessments for FY 25 increased by 23.4% over the past three years according to the State Department of Assessments and Taxation. In Harford County, assessments in Group 2, which mainly covers the southern area of the County, grew by 22.0% with residential and commercial assessments increasing by 23.9% and 17.7% respectively.

Income Taxes FY 25 Approved Budget FY 24 Approved Budget

317,325,000 32.54% of the Total All Funds FY 25 Operating Budget 311,000,000 32.21% of the Total All Funds FY 25 Operating Budget

$ Increase % Increase

6,325,000

2.03%

Income Tax is calculated in Maryland as a percentage of net taxable income. While the State sets a tax rate cap of 3.2% for local governments, the Harford County Council has set an income tax rate at 3.06%. The State Comptroller's Office administers and collects the tax and distributes the receipts to the counties and municipalities. Harford County receives approximately 90% of income tax in quarterly distributions of the withholdings and estimated payments. The county is expecting modest growth in income tax for FY 25 over the revised FY 24 estimate as the economy is expected to cool with the possibility of entering a mild recession. FY 24 income tax is estimated at $306.6 million, which is $4.4 million under the adopted budget. Off of that lowered base, FY 25 is expected to grow by 3.5%, yielding $317.3 million. FY 21 through FY 23 experienced significantly strong income tax growth, some of which was most likely one-time revenue brought forth by Federal stimulus funding. The FY 24 income tax is seen as a resetting of the base in a post-pandemic economy. In light of all of the uncertainty, the County’s Spending Affordability Advisory Committee recommendation was to use the average growth rate of 3.5% that the County experienced over the past forty years. The overall expectation of income tax going forward continues to be positive based on the resilient and diversified local economy and the skilled workforce.

Recordation Tax FY 25 Approved Budget FY 24 Approved Budget

13,335,000 1.37% of the Total All Funds FY 25 Operating Budget 17,000,300 1.76% of the Total All Funds FY 24 Operating Budget

$ Decrease % Decrease

(3,665,300)

-21.56%

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