Beyond Property Taxes: How La Plata Really Pays for Water, Trash, and More
By: Paul Guttenberg, Candidate for Town Council Ward I
This week I was emailed the following question from a resident.
“How will you keep taxes affordable while improving Town Services?”
It is a great question and I wanted to share part of my response here with you as well.
Keeping taxes affordable while managing our towns critical services is a key priority for all of us. So - Lets talk about it.
It's important to understand how our town services are paid for. Many essential La Plata town services like drinking water and garbage collection are self-funded through the quarterly bills we all pay directly for our usage. These user fees cover the day-to-day operations of these services, not our property taxes.
However, these self-funded services do require significant capital investments which are considered outside the daily operations costs our utility bills fund. Like the roof on my house, I don’t consider it a monthly expense to me but every few decades I have to make an investment to re-shingle, that’s a capital investment. These larger projects (greater than $20k), such as expanding our wastewater treatment plant, or replacing aging water pumps, can be paid for generally in two ways: either through surplus revenue generated from our utility bills (enterprise funds) or through our general funds, which do come from our property taxes. Generally, the surpluses left over from utility service operations is small compared to the capital investment needs for that service.
It's crucial to recognize that our need for these capital investments isn't solely driven by growth. We also face a significant challenge with La Plata’s aging infrastructure, which requires upgrades and replacements regardless of any new development. While growth does add complexity, this underlying infrastructure need must be addressed. For example, in the Pinegrove area, a special tax zone was established. New homeowners in this zone specifically contribute to repaying the bonds used to build their new water pipes, stormwater management, and local streets. This is one way the town manages some costs associated with growth. This is why I can say that aging infrastructure costs are somewhat distinct from the growth costs of adding infrastructure. They are not completely severable, but I believe it is an important part of the conversation. The temptation can be to blame all our challenges on growth, however the reality is more complex and residents in the special tax zone are in fact paying significantly more toward the towns infrastructure costs during the 30 year bond repayment period for Pinegrove. This approach was adopted many years years ago as a way to more fairly distribute those costs. I have another article on Substack you can read about this special tax arrangement in La Plata.
An immediate challenge we face is the upcoming end of federal ARPA funding, which has been used for the past four years to cover a substantial portion of our capital investments for town services. With this 'free' money ending, we will need to find ways to operate our services more efficiently because the capital investments we still require must be done to keep essential services operating. Furthermore, we are experiencing significant pressure from inflation and uncertainty surrounding federal and state funding, which impacts our access to additional dollars for capital investment in our services.
Given these realities, it's likely that we will face difficult decisions, and some cost increases for residents may be unavoidable. This is a consequence of circumstances that have developed over several years. While some candidates may suggest temporary relief like “utility bill holidays”, it's important to understand that municipal budgets operate differently from the federal governments budget. We as a town cannot simply borrow or print money indefinitely like the federal government. A municipal budget works a-lot more like our household budgets. It's highly unlikely the town has sufficient cash reserves to cover the cost of town services while simultaneously offering residents a one-time quarterly “holiday” from their utility bills, as some candidates have suggested. My focus will be on making responsible financial decisions, exploring efficiencies, and communicating the necessary steps to maintain and improve our town services in a sustainable and affordable way.
For better town government we must increase La Plata’s voter turn out for our local elections.
Please Vote on May 6th. You can find contact and candidate information for all the general election candidates on the town website. Please also share this information with your friends and family, and encourage them to vote.
Many candidates are also active on Facebook especially within the La Plata Community Group.
A “Vote Local” Plan For Town Council & Mayor
1. Plan To Vote:
Please Verify Your Voter Registration Status. If needed, please update your voter registration before 7 April. If you are not a registered voter, please let this town election be your first! Links for first time Maryland voter registration are on this page.
2. Share Election Information:
Please Share Election Information with Your Family, Friends & Neighbors Who Live in the Town of La Plata. www.voteguttenberg.org/vote-local/
3. Cast Your Ballot On Tuesday, May 6th 2025.
Voting occurs in person at the La Plata Town Hall, located at 305 Queen Anne Street.
Voting hours are 7 am to 8 pm on election day, Tuesday May 6th.
I ask that you consider voting for me as your Town Council representative from Ward I.
More than anything I hope you take the time to vote, and that you encourage others to do the same. When residents vote in larger numbers, it increases the emphasis for elected town leaders to engage and respond to concerns expressed by the public.
Thank you.
Respectfully,
Paul Guttenberg, Candidate for La Plata Town Council Ward I
