The state property tax rate will remain at 11.2 cents per $100 of assessed value, as Gov. Martin O?Malley and Comptroller Peter Franchot resisted arguments by State Treasurer Nancy Kopp to increase the rate by a penny.
Homeowners whose property assessments are rising will pay slightly more for the tax that the state uses to pay off its bond debt. The owner of a $300,000 house will pay about $300 in state property taxes.
The 12-cent rate would “fully cover the debt services for the next five years,” Kopp said at a meeting of the Board of Public Works, which sets the rate.
“It wouldn?t create surplus,” and “it would send a message that the state is fully supporting our debt obligations,” she said.
At the reduced rate, O?Malley will have to appropriate $29 million from other tax revenues to pay bondholders, and that “only exacerbates the structural deficit,” Kopp said. Estimates put net year?s potential deficit at more than $1 billion.
Kopp “makes a compelling argument,” O?Malley said, but he was more concerned about the impact on senior citizens and others on fixed incomes.
“There are other ways to [go] after the structural deficit,” O?Malley said after the meeting.
“Right now there are a lot of conversations at the staff level” about the options, which include reducing budgets and increasing taxes, he said. No decisions have been made, including a decision on whether to call a special session to raise taxes.
Franchot noted, “I?ve always voted for revenue increases in the legislature,” but said, “We shouldn?t address the larger problem in a piecemeal fashion.”
But after hearing Kopp, Franchot said, “I think we should take a vote before I change my mind.”
“We do have a make or break session coming up,” he said. “We don?t have an option to go slowly on this.”
