The Baltimore City Council on Monday approved a 2-cent decrease in the property tax rate over the sole objections of Council Member James Kraft, who said the decrease would do little to help taxpayers in a rising real estate market.
“This does absolutely nothing for the people on fixed income,” Kraft said at the council meeting.
The tax rate will drop from $2.30 to $2.28 per $100 of assessed value, the second year of a planned five-year decrease in tax rates for city property owners. Kraft, though, was concerned that rising property assessments that reflect the city?s improving real estate values would cancel out any savings for his constituents.
“It doesn?t really help if you have a $1,000 mortgage,” said Kraft, D-District 1.
But Raymond Wackes, spokesman for the city Finance Department, said residents with fixed incomes can apply to a city program called “Circuit Breaker,” which limits the rise in tax rates for low-income residents. He also said that all property tax increases are capped at 4 percent, regardless of the rising assessments.
City spokeswoman Raquel Guillory said that thought rising property values are a “nationwide trend,” the city is fulfilling its commitment to make property more affordable.
“We always said that the property tax was the biggest disincentive for people to come to Baltimore; while we?re seeing surpluses, now was the time to take that tax for lessening,” she said.
Figures provided by Guillory show that revenues for the General Fund are estimated to total $1.204 billion for fiscal year 2006, an increase of $97.7 million or 8.8 percent above the fiscal 2006 adopted budget of $1.106 billion. According to Guillory, the total savings for city taxpayers based on the tax decrease for 2006 was $15.9 million, and estimated to be $11 million for fiscal year 2007.
Kraft, the only council member to speak against the decrease, said he was concerned about the appearance of the city giving more significant tax breaks to developers while offering his constituents a decrease of less value.
“It?s a matter of perception that is difficult to explain,” Kraft said.
