Worcester County boasts some of the lowest property tax rates in the state and now it can say its northern properties are among the best values in the state as well.

Those residents and commercial property owners — a part of the state’s “group 1” designation that includes Bishopville, Ocean Pines and most of Berlin — are going to see a continued increase in value for their assets in the coming three years, after the Maryland State Department of Assessments and Taxation (SDAT) reported the group’s 16.5 percent increase among the state’s highest.

SDAT compiles reports every three years with this one reflecting the change from 2019 to 2021. The increase was good for fourth in the state behind group 1 increases in Charles (23.4 percent), Frederick (18.4 percent) and Prince George’s (15.8 percent) Counties. Statewide, group 1 saw an increase of 12 percent.

Ocean City is in Group 3, which reported last year.

Every county plus Baltimore City saw an increase, according to SDAT’s report.

“This is a good indicator that the market remains strong and growth is steady here in Maryland,” SDAT Director Michael Higgs said in a statement. “As part of our Tax Credit Awareness Campaign, each reassessment notice includes information about the Homeowners’ and Homestead Tax Credits, which save Marylanders more than $260 million in taxes each year.”

When split, Worcester Group 1 residential properties saw a 20.3 percent increase compared to 5.8 percent for commercial.

In total, 81.28 percent of Group 1’s 17,809 properties saw an increase, including 96.63 percent of Worcester’s 14,558 residential properties.

Group 1 totaled about $5.2 billion in increased value — $3.84 billion residential and $1.35 billion commercial.

According to Worcester County finance officer Phil Thompson, these valuations are a sign of a burgeoning real estate market.

“The market continues to be very robust,” he said, “We’re seeing a significant amount of activity, certainly on the residential side, which is being challenged by the lack of inventory and a good amount on the commercial side as well with various large properties around Ocean City being sold. So at this point, it’s been very positive.”

Thompson urged those who are seeing the SDAT report to keep in mind that the increased valuations take three years to mete out. Property owners can expect to see some increases quickly, but it won’t be until 2024 wraps up that they’ll see the collective, full growth reflected in their property’s value.

“This is a three-year comparison,” he said. “If you look at the charts and data, this is FY22 right now and looking back to ‘19. The important part is this is going to take three years to phase in as assessments do.”

Thompson also pointed out that those eligible for the Homestead Tax Credit can have their assessment capped at 3 percent annually to mitigate possible corresponding taxes on the increased value.

Basically, the credit acts to limit property tax increase and promote year-round residency in Worcester County, Thompson said.

Property tax rates need to be legislated but, hearing about the 16.5 percent increased values, Commissioner President Joe Mitrecic pointed out that the county does have a few big items that need to be funded. But, he stressed, the commissioners typically try to adhere to the county’s constant yield rate, or the rate the county must charge to bring in what it brought in the year prior.

“Certainly, we have many state-mandated and unfunded issues we need to address this year,” Mitrecic said. “The Kirwan Commission (education plan), (police body-worn) cameras which need to be instituted over the next three years. There’s a tremendous cost (for these items).”

“Those two and an increase to the property values will help us with those things. If we can drill down and do anything else, certainly, a tax decrease is something the commissioners would love to do. But (the county) face the same increase in goods that everyone else out there does. Anyone that’s been to the grocery store or gas station certainly knows what those increases do. The county faces the same challenge.”

Mitrecic said that the commissioners will keep a “lean and tight budget” and will give any money back that they can — if they can. But he said that in the past the constant yield tax rate has not been lowered.

“Hopefully we can lower it this year,” he said. “I don’t have a lot of hope for that but with these other unfunded mandates the state throws at us, we’re going to be frugal and look at every item, as we always do. Maybe we can’t make the constant yield (lower) but we can drop it a couple of pennies to give all our constituents a tax break. Certainly, they deserve that. They’re struggling to make tax bills and bills at all due to rising costs of good and gas and everything else.”

This story appears in the print edition of the OC Today on Jan. 7, 2022.

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