Rockville’s Taxes Too Hot? Too Cold? Just Right?

When people about taxes and city services, you often hear:

  • Our taxes are too high.  Why can’t the Mayor and Council lower the tax rate?
  • We pay a lot in taxes.  We deserve to have trash picked up twice a week.  Why haven’t they fixed my sidewalk?
  • Our taxes are fine, but why does the money always get spent on the west side of town?

and so on.  I’ve never heard anyone say their taxes are too low.

Taxes are certainly one of those topics that will bring nearly any citizen to a frenzy so I try to avoid it whenever possible except to say that I support paying taxes if they are used wisely to preserve and advance the quality of life in our community.  I’m always puzzled by people who absolutely scream about paying taxes, and scream just as loud for those services that are paid by taxes, such as police protection, road repairs, and street lights.  I see taxes as my family’s contribution to pay for those bigger things–such as police police protection, road repairs, street lights, libraries, parks, street cleaning, education, community concerts–that I’m not willing or able to do on my own.  We may disagree on how much we should pay and what things should be supported by taxes (parks? public art? community concerts? affordable housing? public transit? science center?) but I sure hope we agree we should all financially contribute to the commonweal.

But one aspect of taxes that can more easily be settled is whether our taxes are too high, too low, or just right since that’s asking for a comparison.  Fortunately, the State of Maryland provides a comparison chart at http://www.dat.state.md.us/sdatweb/taxrate.html that shows that Rockville’s real estate tax rate is 0.29 (in other words, for every $100 of real estate you own, you pay 29 cents).  That’s far less than Takoma Park (at 0.58) and Montgomery County (at 0.683) but certainly more than Gaithersburg (at 0.212), Washington Grove (at 0.181), and the State of Maryland (at 0.112).   I found most interesting the rates in other towns, such as Chevy Chase (at 0.01), Annapolis (at 0.53), or Frederick (at 0.65).  You’d expect that the higher the tax rate, the nicer the community–but there seems to be no correlation. Comparing rates only gets you so far.

In Rockville, we have several different tax rates depending on the use and location, which are identified as tax classes in the chart.  Here are the definitions:

  • Tax Class 1 at 1.897 (0.1% of Rockville) – Commercial properties within the Town Square boundaries*
  • Tax Class 4  at 0.037 (0.6% of Rockville) – Properties under development/construction
  • Tax Class 5 at 0.397 (0.8% of Rockville) – Residential properties within the Town Square boundaries*
  • Tax Class 50 at 0.29 (98.5% of Rockville) – Commercial and residential properties outside of the Town Square boundaries

Other than Cumberland (at 0.9654), the commercial properties in Rockville’s Town Square have the unenviable distinction of having the highest real estate tax rate in the state at 1.897.

* rates includes Town Square special taxing districts.

Thanks to Stacey Tate in the Department of Finance at the City of Rockville for clarifying the tax rates.

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