In the wake of a bold proposal from a special commission to slash the city?s property tax by raising other taxes and fees, city residents reacted with both hope and apprehension that the plan signals a significant change in strategy for a city saddled with the highest taxes in the region.
“Obviously, lowering the property tax is critical to the health of the city, but the devil is the details,” said Paul Warren, a Mount Vernon homeowner.
The doubling of the homestead tax, the cap that protects city homeowners against rising assessments, concerned Warren.
“It would be devastating to raise the exemption,” he said. “Many of the assessments of owner-occupied homes in our neighborhood have doubled; 4 percent is difficult enough to absorb, let alone more.”
The blue ribbon tax committee formed by Mayor Sheila Dixon to create a plan to lower the city?s high real estate taxes officially released its recommendations Thursday. The report outlines a comprehensive strategy of new revenue sources and taxes that if implemented could allow the city to slash the property tax rate by nearly 65 cents per $100 of assessed value. The current rate is $2.28 per $100 of assessed value.
Among proposed sources of new revenue are a regional sales tax, a commuter tax, increasing the city?s local share of state income taxes to the maximum rate, as well as doubling the 4 percent cap on property tax increases when property values rise.
The commission also recommended bringing full casino gambling to Baltimore rather than only slots, one of several proposals that would need approval from the Maryland General Assembly.
Jody Landers, chairman of the panel, allayed concerns that raising assessment caps would be prohibitively expensive for current city homeowners. “You have to consider the plan as a whole and not single out one part.
“With the exemption, new homeowners are shouldering too much of the tax. The change will bring some balance to it,” Landers said.
Baltimore real estate veteran Richard Halpern, a regional manager for Brio Realty, said that while he supported lowering real estate taxes, the fragile market made him wary of raising funds elsewhere.
“Right now [there are] 1,200 houses on the market in Canton. The market is slow,” he said. “Anything having to do with real estate they shouldn?t raise.”
Newly elected City Councilman Bill Henry, D-4th, said the effort to lower property taxes should be a priority. “There are few government initiatives at this point more important to the long-term survival to the city than figuring out how to increase the tax base,” he said.
“We will not be able to provide the service the city needs if we do not have more resources to work with.” Henry said.
