A tax differential is a rebate on property taxes town residents pay the county for services like fire, police, street cleaning and planning & zoning.
Chestertown provides and pays for many of these services out of its own budget and town leaders have complained in recent years that the absence of a differential has forced the delay of road maintenance and other infrastructure needs.
“County taxpayers living within the municipal boundaries of Chestertown receive none of these services from the county,” Cerino wrote in his Dec. 19 letter to the Kent Commissioners.
A tax differential exists in the vast majority of Maryland counties in the form of lower county tax rates to town residents or direct cash payouts to municipalities, but Kent is one of three Maryland counties that doesn’t provide a rebate or differential to its municipalities. Chestertown received rebates of $100,000 from 2012 to 2014 to help offset declining tax revenue during the recession.
Cerino’s letter echoed many of the talking points he and Ward 1 Councilman David Foster made before the commissioners this summer.
“Put simply, Chestertown residents get far fewer services for the same tax dollar,” Cerino wrote. “They are essentially taxed twice (once by the County and once by the Town) for services that are provided solely by the Town of Chestertown.”
In an interview on Dec. 31, Kent County Commissioner Ron Fithian shot back that the county pays service providers directly, instead of passing the funding through the municipalities.
Fithian highlighted fire protection, EMT coverage and high-speed Internet as examples of direct support services to the municipalities. He said the annual contributions to Chestertown come to “far more” than $250,000.
He said the county pays $1 million annually to operate eight firehouses and $1.7 million for EMTs and paramedics. He said 40 percent of the calls for EMT services are for Chestertown.
In the county’s current fiscal budget, $128,000 went to the Chestertown Fire Department and $70,000 went to EMT services, Fithian said. In Fiscal 2020, the town contributed $49,000 for fire equipment and $20,000 to the rescue squad.
Fithian highlighted the $7.4 million investment in high-speed Internet in the county and said Chestertown municipal facilities were connected “free of charge” at an initial cost of $65,000 to the county. He said there’s about $10,000 in recurring costs the county will pay to cover 10 town facilities.
Fithian said Kent’s other municipalities have not asked for a differential or rebate.
“I think they understand the contributions we make to them,” he said.
Fithian said he understood Chestertown’s tight budget, but that it was not a reason for the Kent County Sheriff’s Office to take over the Chestertown Police Department, an idea that Mayor Cerino floated last year to cut costs.
“I don’t know of a county or town…that at one time or another hasn’t had financial issues,” he said. “You have to make the hard calls if you want to be in charge.”
Fithian reaffirmed that the county is unlikely to support a takeover of CPD and said Cerino and the Town Council are responsible to shore up the town’s budget.
“If you’re going to be the Mayor of Chestertown you gotta’ be the Mayor of Chestertown and make these decisions, good or bad, to best serve your people and pay the bills…”