Office of the Mayor
CITY OF ANNAPOLIS
160 Duke of Gloucester Street
Annapolis, Maryland 21401

January 28, 2020
The Honorable Senator Sarah Elfreth
The Honorable Delegate Alice Cane
The Honorable Delegate Shaneka Henson
Maryland General Assembly
Annapolis, Maryland 21401
The City of Annapolis is grateful for the support of the General Assembly in passing
SB156 and HB129 last year mandating a $750,000 payment-in-lieu-of-taxes (PILOT)
beginning in fiscal year 2021 to the City to help offset the costs of services the City
incurs solely because it is state capital.
It is disconcerting that Governor Hogan included only $367,000 in his proposed
fiscal year 2021 budget and that he proposed to reduce the mandated amount to
$367,000 in the Budget Reconciliation and Financing Act of 2020 (BFRA). This
amount is less than half of the direct cost of services the City provides solely
because it is the state capital, costs that no other municipality in the State of
Maryland incurs. The Governor also proposes in the BFRA to eliminate the annual
increase indexed to inflation, despite that the City’s costs will increase each year to
provide the same level of services. In fact, the $367,000 proposed by the Governor
is no more than the PILOT was in 1996, a quarter century ago.
Because the City does not receive tax revenue from the State of Maryland, the
City’s taxpayers bear an increasing burden to provide these services. State
Department of Assessments and Taxation records show State-owned properties in
the City limits have an assessable base of approximately $325,000,000, comprising
almost 4% of the City’s total assessable base. If these properties were not exempt
from City property taxes, they would generate approximately $2.4 million in
property tax revenue, which is $2 million more than the Governor’s proposed PILOT
of $367,000 and $1,650,000 more than the $750,000 mandated by the General
Assembly last year.
If the State does not provide the full $750,000 PILOT next year, the City will have to
consider what services it is able to provide to both the State and to the residents
and taxpayers of the City of Annapolis. For example, the City would like to provide
two School Resource Officers at Bates Middle School at a cost of approximately
$300,000, and we would like to expand services to our most vulnerable
communities by making health services more accessible through a wellness mobile
or community health centers. Without receiving the full PILOT, it will be difficult to

 provide these enhanced services because the City will continue to divert existing
resources to cover costs incurred solely because we are the state capital.
With a population of only 40,000, the City of Annapolis would not have a bomb
squad or hazmat team if Annapolis were not the State capital. The cost to the
Annapolis Fire Department (AFD) for the bomb squad and hazmat team is
approximately $535,000 in fiscal year 2020, excluding the cost to replace
equipment and apparatus at the end of its useful life. These costs will
increase each year.
Likewise, if Annapolis were not the state capital, the Annapolis Police Department
(APD) would not provide security or traffic control at special events, rallies, and
marches that are the direct result of the Governor and General Assembly being
seated in Annapolis. APD also responds to calls for service; assists with Active
Shooter Training for State employees; provides the use of the APD’s marine vessel,
training, and deployment to assist state operations; deploys canines to State
buildings and for State events; and trains and certifies Maryland Capital Police
canines in explosive detection and patrol. The direct costs of APD providing
these services is approximately $210,000 in fiscal year 2020, excluding
the cost to replace equipment and police vehicles at the end of their
useful life. These costs will increase each year.
These costs above do not include the $42,325 incurred by the City for the
Governor’s Inauguration in 2019. The City’s Office of Emergency Management
(OEM) was integral to statewide meetings, conferences, tabletop exercises, and
operations briefings. OEM, APD, AFD, the Department of Public Works, Information
Technology, and the Mayor’s Office were involved in the planning and execution of
the event, and it was our Emergency Operations Center that was activated on
inauguration day.
Finally, the $750,000 does not include indirect costs, such as road
maintenance ($3 million) or snow removal (varies depending on the
weather). We have not included these costs because it is difficult to estimate how
much of the costs are directly attributable to the General Assembly, the Governor,
the Comptroller, the Department of Natural Resources, the Anne Arundel County
District Court, and the State police barracks being headquartered in the City.
In closing, we ask for your assistance in restoring the full $750,000 PILOT to the
FY2021 state budget. We also ask your assistance in defeating the amendments to
Section 4-608 of the State Finance and Procurement Article proposed by Governor
Hogan in the Budget Reconciliation and Financing Act of 2020.
We are grateful, as always, for your continued support of our capital city.
Sincerely,

 Gavin Buckley
Mayor