Montgomery County’s municipalities get a portion (around 17%) of the tax proceeds that would otherwise go to the county, as municipalities often pay for some functions that duplicate county services, such as police, trash collection, and the like. Hence the never ending fights over “tax duplication” between municipalities like Takoma Park and the county.
The state – through the Comptroller – collects all taxes in Maryland, and then pays out to the counties and towns as appropriate. You’d think it would be a simple matter to figure out who lives in a municipality, and pay out the correct amounts.
You’d be wrong. Comptroller Peter Franchot yesterday acknowledged that for several years his office has paid some municipalities more than they were entitled to, as some addresses were incorrectly coded as municipal when they weren’t.
Maryland Comptroller Peter Franchot is investigating evidence that the state shortchanged Montgomery County of millions of dollars in local income tax revenue when it mistakenly sent the money to county municipalities instead.
Andrew Friedson, a spokesman for Franchot (D), declined Tuesday to specify an amount or how the county might receive payments that are due. County officials estimate a loss of $12 million to $15 million as a result of the misdirected money.
Friedson said the office will hire an outside consultant to determine exactly how much money was involved and how the mistake happened.
“Essentially we made a mistake and we’re admitting and recognizing the mistake,” Friedson said. He added that although the office is aware of issues only in Montgomery, the outside review will look at all jurisdictions “as a matter of fairness.”
$12-15 million, with all due respect to alcohol privatization advocates, is a lot of money. And why does the Comptroller need a consultant to help it fix an obvious problem? Sit down with a map, correct the errors, done. Problem solved.
Another question. Apparently this all came to light when Chevy Chase Mayor Al Lang convened a work group to improve revenue forecasting.
“I was always concerned we didn’t understand the dollars coming in,” Lang said.
He said the group noticed that in 2010, the number of town households in the comptroller’s records jumped from 1,500 to 2,700. When the town asked the office to help verify the addresses, officials said they could not, Lang said.
The tax base of the town nearly doubled in one year – and nobody in Chevy Chase noticed? That is an issue more in need of investigation than the accounting mistakes by the Comptroller’s office.