HAGERSTOWN – City officials are nearing a decision on whether to raise property taxes for the first time since 2019 to balance the fiscal year 2026 budget. At a May 15 work session, council members and department heads debated how best to close a projected $2.2 million shortfall without sacrificing essential services or burdening residents already voicing concern over affordability.
The proposal would increase the property tax rate from $1.02 to $1.075 per $100 assessed value. Finance Director Michelle Hepburn said the increase would generate approximately $2.2 million, with most of the revenue going to support public safety, specifically police and fire departments.
According to Councilmember Kristin Aleshire’s data, around $70 out of every additional $110 tax revenue would go to those two departments.
Opposition from residents and council members
Despite those arguments, council members pushed back. Councilman Sean Flaherty strongly opposed the tax hike, referencing the overwhelming public opposition voiced during a recent hearing. “I cannot in good conscience support a tax increase,” he said. “I work for the residents, telling me how expensive it is to live here.”
Flaherty said he heard from thousands of residents during his campaign who chose Hagerstown because it was more affordable than areas like Montgomery or Frederick counties. “People don’t move here for a stadium or an ice rink,” he stated. “They move here because it’s affordable.”
Councilmember offers compromise
To balance the budget, Councilwoman Caroline Anderson proposed a compromise: approve the 5.5-cent tax increase but cap it through fiscal year 2028 or 2030.
“This gives us time to stabilize our budget and assure the public we won’t keep raising the rate,” Anderson said.
While state law prevents the city from locking in tax rates beyond one fiscal year, staff members said language in the budget motion could reflect the council’s intent to revisit and potentially freeze the rate.
Cuts under consideration
To avoid raising taxes, council members explored cutting or consolidating city services:
- Invest Hagerstown, a redevelopment program that supports first-time homebuyers, costs $500,000 annually and accounts for just $0.38 out of every $110 in tax dollars.
- Potterfield Pool, operated under contract with the YMCA, costs $301,000 but brings in just $93,500 in revenue. Closing the pool would affect summer programming for children.
- Municipal Golf Course, maintained by part time and seasonal staff, operates at a loss. Despite its costs, a vocal group of residents supports the course.
- Hagerstown Ice Rink, owned by the city and operated by a nonprofit, costs the city about $85,000 a year in utilities. A major equipment upgrade could cost $2.7 million.
Staff urges caution on cuts and hiring freeze
Mayor William McIntire’s suggestion for a hiring freeze on non-essential positions met resistance from city staff members and department heads, who warned it could harm operations and morale. Finance Director Michelle Hepburn noted that the city employs 459 people, with 321 in the general fund. She explained that while some seasonal or part-time roles could be reduced, core positions – particularly in planning, inspections and engineering – are already thin.
Public Works and Parks Director Eric Deike added that the seasonal staff members are crucial to maintaining Hagerstown’s 22 parks, golf course and other facilities. “We’ve grown in scope but not in staffing,” Deike said. “We are doing everything we can with what we’ve got.”
One-Time Cuts Versus Long-Term Sustainability
City Administrator Michelle Hepburn urged the council to distinguish between short-term savings and sustainable fiscal planning. While one-time cuts to programs or capital projects might help in the immediate term, the city still faces long-term funding needs.
“If you don’t buy certain equipment or vehicles this year, you’ll still need them next year,” Hepburn said. “Making cuts now doesn’t make the issue go away.”
She reminded the council that $4.1 million in reserve funds had already been earmarked and that using reserves for ongoing operations was fiscally unsound.
Permit fees and revenue opportunities
The council also explored increasing permit and licensing fees to generate revenue. However, staff warned that doing so could discourage development and conflict with the city’s goal of attracting new investment. Hagerstown’s permit fees are currently tied to project value, and while revenue for FY25 is expected to exceed projections, that success was driven by a few large, unpredictable developments.
Next steps
As the budget deadline nears, council leaders will soon have to choose between implementing the proposed tax increase, making extensive service cuts or taking a hybrid approach. The council plans to hold further discussions in the next few days. Any decision will be made in the multiiple shadows of community input, city responsibilities and long-term sustainability. The council must reach a final decision by the end of May to finalize the FY26 budget.
