The group that wants to run a slots parlor in Baltimore has agreed to a deal that -- city officials say -- could mean an eight-cent reduction in the property tax rate, as Annie Linskey and Gadi Dechter report today.
The city's rate of $2.268 per $100 in assessed value is the highest in the state -- more than twice as high as other jurisdictions' rates. (It's also a continued source of complaint for residents and angst among folks who want more people to move into Baltimore.)
The Dixon administration points out that the cut won't be immediate -- and it relies on slots performance. From today's story:
Under the agreement, the casino would provide ground rent to the city via a profit sharing agreement on gross gambling revenues, and those funds won't begin to flow until the casino is operating, which city officials hope will be in 2011. The money from slots must be used for either property tax reduction or school construction, so those funds cannot be used to eliminate expected budget shortfalls in those years. ...
According to the deal, the bidders will pay the city $20.8 million when the casino opens, which includes ground rent, property taxes and other revenues, said First Deputy Mayor Andrew Frank. That would provide a minimum five-cent reduction in property taxes. Since the revenue is based on the casino's performance, Frank said, the city's share could grow.
To allow an eight-cent reduction, the parlor would need to produce about $25.4 million a year in revenue. That's what the city is forecasting within five years.
If all those if's come to pass, a city resident paying taxes on a $200,000 assessment would see his or her property tax bill drop from $4,536 to $4,376, a $160 savings.