(Feb. 16, 2017) Late last year when it was revealed Comptroller Peter Franchot’s office misallocated a total of about $21.4 million, it was discovered that Snow Hill was the lone Worcester town to owe the state money.
A new bill aims to forgive that debt.
The matter wasn’t exactly pressing, since the state had already agreed to a 17-year payback schedule, outlined by Franchot in response to the discovery.
“For those jurisdictions that owe money as a result of this reconciliation process, we are mitigating the financial impacts by providing ample time for long-term budget planning,” the statement read. “Those jurisdictions will not have to begin repaying what is owed until 2024, and they will have the flexibility to repay the funds over the course of ten years from that point forward.”
Snow Hill was found to owe the state $17,784.
Senate Bill 397, sponsored by George Edwards (R-1) and Richard Madaleno (D-18), is known as House Bill 1433 in the other chamber of the state’s legislature and is co-sponsored by more than a dozen delegates including several from Prince George’s County. Neither Sen. Jim Mathias nor Del. Mary Beth Carozza have signed onto the legislation, but lower shore delegates Chris Adams (R-37B) and Carl Anderton (R-38B) have.
“We’re the county seat and we always seem to get the short end of the stick,” Snow Hill Mayor Charlie Dorman said. “We’re paddling upstream. We’re set to open four new businesses soon, and could finally be turning things around.”
Dorman wholeheartedly supports the measure and has penned a letter to the members of the Senate Budget and Taxation Committee to that effect. The legislation is scheduled for a public hearing on Feb. 15.
Dorman said the amount of money isn’t huge, but comes on top of several other state mandates requiring local funding.
“This comes on the heels of eight years of drastically reduced state-shared highway user revenues and word that our future allocations of local income taxes will be reduced to reflect the smaller income tax distributions called for because of the recent state audit,” Dorman wrote in the letter. “The required payback is therefore exacerbated by the permanent loss of local tax income tax revenues that our municipality has relied on.”
According to the bill analysis, performed by the nonpartisan Department of Legislative Services, the local effect of the bill will prevent revenue losses of between $21 million and $24 million statewide, while state finances and small businesses are not affected.
Worcester’s other municipalities were actually owed money by the state.
Berlin was owed the most, as Town Manager Laura Allen said she received notice that the municipality is owed $134,779.
Ocean City is next, but only got a little more than half of what Berlin did at $76,800, according to Doug Miller, city manager.
Pocomoke City got back about $31,000 due to the error, according to City Manager/City Attorney Ernie Crofoot.