Baltimore City Council member Robert Curran (D-3) wants lenders to take care of homes in foreclosure that they financed. This may be a good idea. And it may help to prevent vagrants from moving into abandoned homes and plant a few more flowers in yards. But he?s wasting our time.
The bill and the city?s move to sue certain lenders with a high percentage of foreclosure rates in minority neighborhoods will not expand the city?s tax base.
That must be the single most important goal for City Council members. Budget analysts estimate the city will see a $20 million to $30 million drop in recordation and transfer taxes as a result of fallout of the housing market.
The only way to stop that hemorrhaging is to make it more attractive to buy in Baltimore City. The mayor?s blue ribbon commission already outlined how: Cut property taxes.
As the commission noted in its recent report, “Many believe that the high property tax rate serves as a disincentive for residents and businesses to locate in the City of Baltimore; the Committee is convinced that is the case.”
The committee members outlined numerous ways to slice the rate ? more than twice as high as surrounding jurisdictions ? with offsets from other taxes and higher payments for services from the city?s large nonprofits. We think the surge in revenue from new residences and businesses will abolish the need to raise taxes in other areas. But we agree nonprofits must contribute more to the city for the services they receive. The city will not provide a detailed accounting of the imbalance.
Of course, as always, the best way to reduce taxes is to cut inefficiency, waste and fraud in government squandering.
One crystal clear reality is that high taxes attract nonprofits and repel businesses and their employees. About one-third of city property generates no taxes because it is owned by government or nonprofits, leaving the rest of us to pick up the slack.
So if Curran and the rest of the members of the City Council want to help Baltimore recover lost revenue, they would best serve residents by swiftly moving to reduce taxes. It is the only long-term solution to attract and keep businesses, residents and their money in the city.
