"It's such a monster of an issue that nobody really attacks it in earnest," she said.
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.
About this series
Today The Baltimore Sun begins a series of occasional articles on property taxes in Baltimore, whose highest-in-Maryland rate is seen by many as a major drag on the city. Future articles will explore who pays what and tax breaks available to owners. Today's article shows how the homestead credit has ballooned into a huge subsidy, fueling broad disparities in how the city's tax burden is shared.
To report the series, The Sun asked the city for the net tax bill and any credits for each of the city's 236,000 properties. After officials said they lacked the technical means to produce that level of detail, The Sun built its own database, using an automated process called "data scraping." Information was copied, one record at a time, from individual tax records publicly available on the city's website.
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the housing market and runs the Real Estate Wonk blog. Her coverage has won national awards, including a "Best in Business" recognition this year from the Society of American Business Editors and Writers.
Reporter Scott Calvert joined The Sun in 2000. He was the newspaper's Africa correspondent from 2005 to late 2007, and last year his investigation of a Baltimore mental health clinic prompted state health officials to develop new oversight measures.