By Jean Marbella, The Baltimore Sun
2:04 PM EDT, July 27, 2013
Remember that card in Monopoly, "Bank error in your favor, collect $200?" With the top-hatted rich guy jumping in surprise and glee as the teller hands him the bills?
In Baltimore, it's more like, "Tax assessment error in your favor, keep the $1.5 million."
Because after all, it's not like the city is hurting for revenue.
As Luke Broadwater and Scott Calvert reported in The Sun this week, the city has decided to let bygones be bygones when it comes to the tax breaks mistakenly given to some commercial property owners. The city's finance chief, Harry E. Black, said that because the owners had paid what they were billed — however erroneously — they couldn't be re-billed for the amount they actually owed.
Underbilling hasn't stopped the city from going after back taxes in the past — numerous homeowners who were found to have gotten a variety of property tax credits in error were subsequently billed for the difference.
This time, though, Black said an analysis by the city's legal department concluded that the owners of the commercial properties couldn't be billed for the taxes that they actually owe. And these are substantial sums in some cases — the Atrium apartments in the former Hecht's department store on Howard Street downtown, for example, was underbilled by $576,000.The Sun's review of the top 10 recipients of tax credits for restoring historic properties found underbilling mistakes totaling more than $1.5 million.
The tax breaks for rehabs are, on the face of it, a worthy incentive, rewarding those who have converted warehouses into cool condos or given new life to rowhouses that otherwise would be left vacant. Those who qualify don't have to pay property taxes on the value of the improvements for 10 years.
But, as The Sun has documented, the credits are frequently miscalculated — much in the same way as other property tax breaks have been, such as those for new construction or even the most common one, the homestead exemption for people who live in their homes.
Admittedly, these tax credits are no easy thing to administer: Each has different qualifications, some only go to the original owner, some transfer with the property, some are valid for five years, others for 10. And there are a bunch of them, I learned from looking at the city's tax credit page. There are credits for dwellings on cemetery property, for example, and for artists in residence in neighborhoods like Station North and Highlandtown. And, of course, as the developers of Harbor Point have taken advantage of, there are credits for building on contaminated brownfields, and in impoverished enterprise zones.
So yes, it's complicated, but surely not impossible to calculate an accurate bill. Can there really not be a computer program out there where you plug in an address, and all the approved tax credits for that property are automatically applied? Why are we still hearing of "clerical" errors, "coding" problems and the ever-popular system "glitches?"
But the greater problem, it seems to me, is what the city does once it learns of a mistake. The city previously had a no-excuses policy when it came to the private homeowners, some of whom hadn't even applied for the tax breaks that appeared on their bills, under vague wording like "special credit." However blameless the owners might have been, the city demanded they pay back the ill-gotten credit.
But now, the city seems willing to forgive commercial property owners whose historic credits were miscalculated in some cases — to the owner's benefit and the city's loss — by more than $500,000.
Shades of Leona Helmsley, the hotel magnate and so-called Queen of Mean who when convicted of tax evasion supposedly said, "Only the little people pay taxes."
I don't know, maybe life really is like a Monopoly game, which always seemed skewed toward the rich getting richer anyway. Everyone knows you pay more rent when you land on Park Place than on Baltic Avenue, but who knew the former was getting better tax breaks than the latter as well?
But of course, however much or little they were billed, it still was only play money.
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