The city is looking for ways to ease the property tax burden on hundreds of homeowners who received unexpectedly high bills last month, officials said, as Baltimore reckons with past errors in a popular credit for historic renovations.
The tax increases, which can be in the hundreds or thousands of dollars, have hit more than 300 people who had been underpaying because of miscalculations. Henry J. Raymond, deputy director of the Finance Department, cautioned that the city's options are limited.
"The finance director has no legal authority to knowingly issue incorrectly calculated tax bills," Raymond said.
Still, finance director Harry E. Black said officials would meet with state officials to explore "what options we might have to relieve or lessen the impact" on owners. The city says the state's assessments agency chronically miscalculated the discounts. Black did not elaborate on those options.
Several lawmakers want the city to honor the wrongly inflated credits until they expire, arguing that homeowners should not be penalized with higher taxes. Some legislators say the state should compensate the city for the lost revenue.
But officials at the state Department of Assessments and Taxation say the city bears partial blame for some errors and argue that certain problems cited by the city merely reflect different methods.
For the first time Thursday, city officials gave a detailed tally of the errors they found after a year-long review of the historic credit program. The credit, established under state law, is meant to encourage investment in older structures by making the value of approved renovations tax-exempt for 10 years.
Of 1,253 city properties covered by the program, officials said, they found 315 cases in which errors caused the city to underbill owners. New calculations have reduced these credits by at least 5 percent, pushing up the tax bills for those owners. Officials say they won't seek back taxes from these owners.
But the city also found 241 instances in which errors resulted in owners previously paying the city too much tax, meaning the size of their discount has risen with the new tax bills. Asked if they would receive refunds, Raymond said only that officials would consider those "on a case-by-case basis."
All told, officials found 556 credits — 44 percent of the total — had errors the city considers meaningful. The rest of the credits either changed little from last year or were new to the program, Raymond said. The city took over responsibility last year for calculating historic credits from the state.
The city's review also found that 41 property owners had been getting a historic credit without ever having applied. Raymond said the city cannot recoup those discounts because they stemmed from a government error. The credits have been removed on the new tax bills.
Last year, The Baltimore Sun documented five such cases, which state officials attributed to coding errors. Those owners were required to pay. It's not clear whether they have received refunds.
The city has yet to determine the financial effect of the errors, Raymond said.
Most of the problems with the historic credit involve homes. But commercial properties have also been affected. Last year, a Sun analysis found that several apartment buildings and a hotel were underbilled by more than $1.5 million over several years.Copyright © 2014, The Baltimore Sun