Mayor Stephanie Rawlings-Blake said Friday that the persistence of tax bill errors is a "serious problem," even as criticism of her administration grew over errors that have caused the cash-strapped city to miss out on revenue.
Rawlings-Blake said she is committed to end the mistakes as part of a continuing overhaul of the way property tax breaks are managed by City Hall. "It's very important that we get these things right," she said in an interview.
City Council President Bernard C. "Jack" Young said he wants the problems fixed quickly because "Baltimore City needs every dime it's entitled to, and we need to collect it."
Their comments came in response to a Baltimore Sun article Friday showing that the city has undercharged the owners of three commercial properties by more than $700,000 in recent years because ofo errors by city and state officials in calculating tax breaks. Among them is One Charles Center, a 23-story downtown office tower owned by Orioles majority owner Peter G. Angelos.
Some of those underbillings in the Enterprise Zone Tax Credit program were later corrected. But they mirror previously reported problems in city tax collections. In recent years the city failed to collect more than $2 million because of errors in other tax programs, The Sun has found.
Councilman Carl Stokes, who chairs the taxation committee, said Friday that he would hold a hearing next month to question city officials about the latest errors.
While the city has taken steps to recoup this year's enterprise credit errors, officials have said that they cannot legally collect back taxes in cases where the underbilling resulted from government error.
That means the city will forgo close to $200,000 it could have collected in past years if the enterprise credits had been computed accurately on two of the properties.
The forgone revenue is even higher — over $1.5 million — because of errors on a separate tax discount meant to spur historic renovations.
City finance officials have refused to release the legal opinion, drafted by city lawyers, on which they base their position on back taxes. On Friday, Rawlings-Blake said she was satisfied that the public knew enough because Finance Director Harry E. Black has summarized the opinion.
But Young said he wants the public to see the opinion — and will issue a subpoena if necessary.
"I'm a little beside myself with Finance saying we can't go back and get money owed to us," he said, asserting that government mistakes haven't stopped the city from collecting on old water bills. "If we're going to make some people pay and others don't have to pay, that seems to be inconsistent."
Homeowners who were found to be wrongly getting more than one homestead credit, knowingly or not, were billed by the city going back several years. And there are other types of tax break errors where the government has billed owners for back years, even when officials caused the error.
For example, the state Department of Assessments and Taxation recently billed 33 homeowners who — due to the state's mistakes — got excessive discounts a few years ago under the Homeowners' Credit program, which helps those with low or moderate incomes.
Like Young, Stokes said he disagrees with the city's decision not to seek back taxes, arguing that the city should adopt a consistent policy of billing owners found to owe more than they were charged.
This year the city took over the job of computing enterprise zone and other credits from the state after city officials grew frustrated with what they deemed too many calculation mistakes by the state — errors the city failed to catch at the time they were made.
The city then undercharged One Charles Center by about $311,000 because of its own miscalculations. Later, the city issued a revised bill, which Angelos' real estate company said would be paid.
The state reimburses the city for half the cost of enterprise zone credits, which are meant to spur development in distressed areas.
City finance officials say major changes being made to the tax credit process will allow the city to automate the calculation of credits and to track credits over a period of years. Mayoral spokesman Kevin Harris said the city expects to implement upgrades in the coming weeks.Copyright © 2014, The Baltimore Sun