By Luke Broadwater, The Baltimore Sun
11:01 AM EDT, October 8, 2013
Chronic mistakes in Baltimore's tax bills commanded attention at City Hall Monday as the mayor said her administration is fixing the problems and the comptroller ordered an audit nonetheless.
Mayor Stephanie Rawlings-Blake said the city is implementing an automated system to reduce mistakes — which officials acknowledged have cost the city $11 million in the past decade — and she asked citizens to give finance officials "a chance to work."
But a City Council chairman called for an audit, and Comptroller Joan M. Pratt said her office has asked for the documents needed to perform one. "I want to make sure the citizens are being billed properly," Pratt said.
The actions came after investigations by The Baltimore Sun that uncovered millions of dollars in errors in property tax bills. The Sun reported last month that Baltimore has undercharged the owners of three commercial properties by more than $700,000 in recent years because of errors by city and state officials in calculating tax breaks. Among the properties is One Charles Center, a 23-story downtown office tower owned by Orioles majority owner Peter G. Angelos.
Errors in the Enterprise Zone tax break program followed other mistakes in city tax collections documented by the newspaper, including more than $2 million in improper credits for owners of rental and historic properties.
Most of the City Council joined the taxation committee chairman, Carl Stokes, in sponsoring a resolution calling for an audit of the city's tax collections.
"It is one level of incompetence to continue to have so many errors, but it is another level of indifference not to address them time and again and not to allow a true and full accounting to the citizens and taxpayers of Baltimore City," Stokes said.
The city finance department laid out a plan it said will "crack down" on the mistakes by automating more of the process and relying less on the state government — where many errors originated — to calculate bills. But some council members said they've lost so much faith in the city's ability to properly collect taxes that they called on the mayor to consider hiring a private firm to take over the work.
Pratt said auditors have requested documents from the finance department for five key functions, including property tax billing and revenue collections. She said her office — which requested the documents after meeting with City Council President Bernard C. "Jack" Young — was waiting for the finance department to turn over papers for review. Young identified the city's treasury, risk management and procurement agencies as other key areas that needed audits, officials said.
The mayor said on Monday that she, too, was frustrated by the errors. "These errors have frustrated tax credit recipients and caused many to lose confidence in the government's ability to do one of its most basic functions," Rawlings-Blake said. "I share that frustration."
Finance Director Harry E. Black said the city has taken over the job of calculating tax credits from the state. Finance officials also have instituted internal audits of "all tax credit accounts" to identify errors, and expect a new automated system to be fully functioning by March, he said.
"Too many hands were actually touching the process," said Black, who blamed "inadequate interagency coordination" for the problems.
Since taking over tax calculations, Black said, city officials have corrected many problems. "The bills that went out in July of this year, we believe, are error free," he told reporters at a news conference.
But other officials acknowledged last month that the city sent out some erroneous bills in July after they were alerted to the errors by The Sun. Kevin Harris, a spokesman for Rawlings-Blake, said late Monday that Black meant the bills "have since been corrected."
Rawlings-Blake said a "Billing Integrity Unit" she established in 2011 has "recovered millions of dollars" in erroneous bills. "They have already been doing audits," she said. "That's why we've been able to identify errors. It's a misrepresentation to say we're in fear of audits. Yes, we want audits but we want to make sure we're not being redundant."
Besides calling for an audit, Stokes introduced a second resolution asking the finance department to consider privatizing tax calculations and collections. Two council members co-sponsored that measure.
"I know the current administration has done more in the last couple of years than any other administration," said City Councilman William H. Cole IV, who backed the call for an audit. "The reality is, we have problems and they need to be addressed. ... It doesn't take rocket science to figure this out. It takes man-hours."
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