www.baltimoresun.com/business/bs-bz-homeowner-tax-credit-reax-20120227,0,7243561.story

baltimoresun.com

City officials want to spread word about homeowners' tax credit

Many of modest means don't know about Homeowners' Property Tax Credit, council members say

By Jamie Smith Hopkins, The Baltimore Sun

8:34 PM EST, February 27, 2012

Advertisement

Two Baltimore City Council members are planning campaigns to get the word out about property tax assistance for homeowners with modest incomes, reacting to a Baltimore Sun article that showed the pool of apparently eligible city homeowners is far larger than the number of people actually receiving the help.

"Probably a large percentage of the people aren't aware of it," said Edward Reisinger, vice president of the Baltimore City Council, who said he talked to two residents just last weekend who could benefit from the Homeowners' Property Tax Credit — if they'd known to apply. "It's like, are we keeping it a secret?"

The statewide program caps the amount homeowners must pay if their household income doesn't top $60,000 and they have less than $200,000 in assets, not including their home and retirement savings. The state picks up the tab for the forgiven amounts, which vary based on income and the size of the original tax bill.

The credit is reducing taxes on 10,500 homes this year — to zero, in some cases. But about 55,000 owner-occupied households in Baltimore have income of $60,000 or less, according to the Census Bureau's 2010 American Community Survey. Assuming their tax bills are high enough, those homeowners would likely qualify for the break.

Reisinger said he's going to send information about the tax credit to community leaders, senior centers and others in his southern Baltimore district who could further spread the word. He said he would also speak to Mayor Stephanie Rawlings-Blake about what could be done to reach more residents citywide.

The fine print in city tax bills that gives the name of the program and a number to call — without details about the program's purpose — is insufficient, he said.

"We should be trying to touch everyone in Baltimore City who could benefit," he said.

Ryan O'Doherty, a spokesman for the mayor, said her office received calls from homeowners hoping to get the credit after the Sun's story appeared Sunday.

"Almost every tax credit program — local, state and federal — that requires an affirmative application faces this challenge of 'getting the word out' when there are limited marketing resources," he said in an email. "We can always do more to work together to publicize tax credit programs through the web and social media."

The state Department of Assessments and Taxation, which oversees the program, doesn't have the budget to advertise the program. Its efforts include getting fliers inserted in Baltimore Gas and Electric utility bills at least once a year, training staff at housing groups and public agencies that work with the elderly, and providing information in the property reassessment notices that homeowners receive every three years.

City Councilwoman Mary Pat Clarke is concerned that homeowners will miss information when it's included with other mailings. Email blasts and online efforts, meanwhile, won't reach homeowners without Internet access — the people she suspects are the least likely to know about the tax credit.

Her plan is to go door to door with fliers in her northern Baltimore district to try to increase participation.

Clarke said the credit was a "godsend" for an elderly relative with a small income, allowing her to stay in her home. The councilwoman said she wanted everyone who qualifies, especially the elderly, to be similarly protected.

"We've got to do outreach," Clarke said. "You have a whole bunch of people out there who should be getting it who need to apply."

If many more do, that would create a different sort of challenge — a bottom-line one. Every additional 1,000 recipients costs the state about $1.2 million per year.

The Department of Legislative Services has already flagged the program as a budgetary concern because the recession increased participation and costs. Statewide, the owners of about 50,000 homes get the tax help, up from 46,500 in 2008.

But local governments don't pick up the cost. That gives City Council members extra incentive to make sure their constituents know about the program.

"It's a real benefit that the state provides to the city because the state is helping us hold onto our homeowners as they age," Clarke said.

The 37-year-old program was originally for older homeowners only, but it was quickly expanded to all ages. A later change permitted home buyers to apply for the credit before purchasing so their lower tax liability could be taken into account by their lender — helping them get a home rather than keep one.

The Sun found that more than 700 recipients of the homeowners' credit purchased their city homes within the last five years. The list includes young professionals whose parents helped them buy homes for $300,000 or more. Though the credit applies only to taxes on the first $300,000 of value, the program is open to homeowners with more valuable properties.

Some state legislators questioned whether the rules should be tightened.

"There's certainly nothing wrong with bringing young professionals into Baltimore City — it's a good thing," said state Sen. Richard F. Colburn, an Eastern Shore Republican. "But if, say, because of parental help they're able to purchase a very expensive home, there should be some limitation. … If the parents are helping them buy the home, then they can help them with the property taxes, too. You have to afford what you buy."

Clarke, noting that Rawlings-Blake hopes to attract 10,000 new families to the city over the next 10 years, is more enthusiastic about the idea of medical residents and others with temporarily modest incomes buying in Baltimore and getting the homeowners' credit for a while.

"If it's attracting people to come here and buy here, that's what we want," she said.

jhopkins@baltsun.com

twitter.com/RealEstateWonk

For more information

To find out if you qualify for the Homeowners' Property Tax Credit, go to http://www.dat.state.md.us/sdatweb/htc.html or call 410-767-4433.

  • Text BUSINESS to 70701 to get Baltimore Sun Business text alerts