Comptroller William Donald Schaefer changed his mind Wednesday, and the owner of a $200,000 to $300,000 house will save $40 to $60.
In a surprise move, Schaefer joined Gov. Robert Ehrlich in supporting a 2 cent reduction in the state property tax that backs up state bonds.
“It would be absolutely wrong not to give the money back to the people,” Schaefer said at the Board of Public Works meeting. Taxpayers “need to get a little break.”
Schaefer had opposed Ehrlich?s attempt to cut the tax last year. On Tuesday, he had joined with State Treasurer Nancy Kopp in voting against the property tax cut proposed by Ehrlich?s budget secretary on the Commission on State Debt.
Ehrlich had supported raising the state property tax by 5 cents to 13.2 cents per $100 in assessed value in 2003 as part of an overall belt-tightening to make up for large deficits. This was done “to protect the triple-A bond rating,” Ehrlich said.
This almost hallowed rating allows Maryland to float bonds at the lowest interest rates.
Koppsaid Wednesday?s move was shortsighted, since similar large “structural deficits” are looming. Next year, she said, the state will either have to raise the tax again, or transfer money out of general revenues to assure the bonds get paid.
House Speaker Michael Busch pointed out that the legislature had supported a property tax cut two years in a row.
As Schaefer explained his change of heart, he said, “I can?t wait till I get my gas bill in July,” alluding to the Baltimore Gas & Electric Co. rate hikes that will hit many customers the same time as counties send out their property tax bills, which include the state property tax.
Kopp alluded to the politics of the vote. “I don?t have to run for office” this fall, she said to the laughter at the board meeting. Schaefer and Ehrlich are running for re-election. The state treasurer is elected by the members of the new General Assembly every four years.
The Democratic Party slammed Ehrlich for the tax cut, just as they had flayed him for tax increases.
“This is a sham,” said party Chairman Terry Lierman. “Ehrlich?s tiny gesture today is the kind of cheap election-year ploy that gives public service a bad name.”
Lierman did not mention Schaefer, a Democrat.
Savings under Md.?s 2 cent property tax reduction
The state Board of Public Works approved a state property tax cut Wednesday that is a 2 cent reduction per $100 of assessed value. Here?s the projected savings per year after the cut:
» For a home worth $100,000: $20 » For a home worth $200,000: $40
» For a home worth $300,000: $60 » For a home worth $400,000: $80
» For a home worth $500,000: $100 » For a home worth $1 million: $200
» For a home worth $2 million: $400 » For a home worth $3 million: $600
Source: Maryland Department of Legislative Services
