The city has to do something, she said, because the high tax rate is a tremendous problem. But Gosson said it has proved politically easier to do little or nothing.

"It's such a monster of an issue that nobody really attacks it in earnest," she said.

City leaders couldn't eliminate the homestead credit themselves — even if they wanted to — because the program is state law. The city could push the cap to 10 percent, a move recommended by a property-tax commission in 2007 as part of a strategy for lowering the city's tax rate, but a spokesman for Baltimore's mayor says such a change would not by itself allow for a significant rate drop, and might push current homeowners out of the city.

None of the counties in the Baltimore region have caps above 5 percent. Anne Arundel — the only county in the state that forgoes more taxes than Baltimore as a result of the homestead — has a 2 percent cap.

"Every day, people are making decisions about whether or not they're going to stay or leave the city," said Ryan O'Doherty, Rawlings-Blake's spokesman. "I don't think that increasing property taxes on people who have lived here for a long time is going to help us grow."

The mayor recently announced a goal of attracting 10,000 new families to Baltimore over the next decade, though she has offered no details. She has also proposed a relatively modest plan to cut the tax rate on owner-occupied homes by 9 percent over eight years, to $2.068 per $100 of assessed value.

Elected leaders and political candidates in the city often talk of lowering the rate, but little has been done on that front. It was cut just six cents for every $100 in assessed value over the last 10 years, starting under then-Mayor Martin O'Malley and ending during Sheila Dixon's administration.

Over that same period, the homestead break has kept roughly $700 million out of city coffers. Early in the last decade, its value to homeowners — and thus, its cost to the city — amounted to less than $8 million a year. Once the real estate market took off, it rocketed to a peak of nearly $150 million two years ago.

Falling values mean less money shielded from taxation by homestead breaks. But the state estimates the credit will still shave $100 million off city tax bills next year.

Even so, the credit has a certain appeal to city budget officials. It has kept revenue out of the coffers, but it has also cushioned the blow of the housing bust. That's because many homeowners are still catching up to their full assessments, paying 4 percent more each year than the year before. So the city's property-tax revenues haven't yet dropped despite several years of falling home values, O'Doherty said. He anticipates next tax year will be the first since the downturn to register a decline in that revenue source.

The mayor supports the homestead program, O'Doherty said. "Should this credit exist? Absolutely."

Brett Theodos, a housing and development specialist at the Urban Institute, says he understands why owners would want to know their property taxes won't rise much for the indefinite future. But awarding tax breaks based on the homeowner's income makes more sense to him. Maryland does that as well, offering a "homeowners' credit" to households with $60,000 or less a year.

Under the current system of homestead credits, it could take years for many homeowners to pay full freight. Decades, in some cases. And that's assuming home values never rise again.

"Seems like a long time to get back to normal," Theodos said.

Tribune Interactive programmer Kit Mobley contributed to this article.

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