Over the past two years, Maureen Coyle has received $5,700 in property tax breaks that the city admits she never requested for her Patterson Park rowhouse. Now the city is demanding full repayment by month's end.
If she doesn't or can't pay by then, the city says she'll be hit with $990 in penalties and interest. "This will definitely be a hardship to put it mildly," said Coyle, a social worker who doesn't have "a spare $5,700 just hanging around."
Coyle is one of a handful of city homeowners who suddenly owe back taxes after The Baltimore Sun reviewed a random sample of homes receiving a tax credit for renovations to historic properties. The Sun found five erroneous credits, but reviewed just one-sixth of all the credits granted citywide, so there could be more.
The value of the errors, which originated at the state, ranged from $1,700 to $9,200. And the city not only expects repayment, it expects it right away.
Another homeowner, Catherine Parks, got stuck with an unexpected $7,630 bill for back taxes after the city belatedly discovered that a new construction tax credit had been wrongly applied to her Canton home.
"Baltimore's system of accountability is very poor," said Parks. She and her husband are so frustrated that they're moving back to Florida as soon as they can sell their house.
The billing errors are the latest sign of problems involving the state assessments agency and the city's Finance Department — miscues that have likely cost the city millions of dollars in tax revenue over the past several years.
Among other failures documented by The Sun: 465 vacant houses wrongly getting homestead credits meant for owner-occupants, more than 550 owners improperly "double dipping" on the homestead and two cases where the state vastly under-assessed homes after multiple lots were combined.
The city's policy has been to play hardball when erroneous credits are discovered, and seek immediate repayment of any undeserved tax breaks.
But some City Council members want the city to go easier on these owners — and to make tax bills clearer so errors can be caught before the problem festers.
Council President Bernard C. "Jack" Young thinks Coyle and the others should get more time to repay, without penalty. "It's totally unfair," he said, "to have these five homeowners given an ultimatum — 'We made this mistake … but you have to pay by April 30 or else.'"
Councilman James B. Kraft agrees.
"The city needs to work out a reasonable payment schedule for these folks without penalty, without interest," he said. "There's no way these people should have, could have, known that they were wrongfully receiving the credit. And it's not their fault."
Aides to Mayor Stephanie Rawlings-Blake aren't making any promises. After first insisting that city law requires the deadline and penalties — even if the taxpayer isn't at fault — officials said Thursday that Finance Director Harry Black can approve a payment plan and waive penalties.
Mayoral spokesman Ian Brennan said taxpayers must first dispute their bills, adding in an email "that's not [yet] the case here at this point."
The recent examples differ from cases where some owners, found to be improperly receiving two or more homestead credits, said they didn't know they were enjoying multiple breaks. But those owners or their agents had actually declared the homes as principal residences at some point.
By contrast, the owners who now must repay erroneous historic or new construction credits did literally nothing to get their breaks, and they say that's a big reason they didn't realize the mistakes.
Because of widespread confusion among homeowners, Kraft asked the Finance Department to clearly identify tax credits on tax bills and says officials agreed to make the changes. At present, several types of breaks — the historic credit and one for new construction, among them — are listed as "special credits."
Parks' erroneous new construction credit was identified only as a special credit, for instance, so she thought it stemmed from a successful appeal of her home's assessed value. The homestead credit, meanwhile, appears on tax bills as an "assessment credit."