Mayor Stephanie Rawlings-Blake wants to give a tax break to supermarkets that locate in unserved Baltimore areas and to add more protections for homeowners facing a city tax sale because of unpaid taxes or water bills.
The two proposals are key parts of a package of bills Rawlings-Blake will ask the Maryland General Assembly to pass during the three-month session.
In unveiling the agenda Monday, Rawlings-Blake said she wants to give more families in the city access to healthy food and help residents keep their homes.
The supermarket tax proposal would let the city grant a 10-year break on personal property taxes —for items such as freezers and cash registers — to grocers that locate in certain areas of the city. The tax sale proposal would increase the amount of back taxes or outstanding water bills that could trigger a sale to $500, up from $250, and add other protections for homeowners.
"You have to figure out strategies to help eliminate food deserts," said Rawlings-Blake, pointing to the city's push for farmer's markets to accept food stamps, the expansion of urban agriculture and the appointment of a food czar about five years ago, one of the first positions of its kind in a major U.S. city.
"We continue to drive forward this vision to make quality food accessible," she said.
One in five residents live in so-called food deserts, which are defined as pockets in the city where the nearest grocery store is more than a quarter-mile away, many residents are low-income and nearly half don't have access to a vehicle.
The legislation would enable the City Council to waive personal property taxes for a decade for companies that open grocery stores where none currently operate. The city also could make the tax break available to stores that undergo major renovations in places that offer residents few options for healthy food.
Baltimore's personal property tax rate is 21/2 times the rate retailers pay for real property, which includes the land and structures. City officials had no estimate of the potential revenue loss for the city because they still were analyzing it.
Jeff Zellmer, senior vice president of the Maryland Retailers Association, said the proposal would be an attractive incentive to grocers.
"Right now anything is an incentive to the retail industry," he said. "Sales are flat, they're stagnant. It also gives the opportunity to people who don't have fresh produce and other wholesome food available. There is a definite lack of facilities that cause these food deserts, and any incentive would help."
Zellmer said the city could face a challenge in selling the idea to some legislators who will want to know how Rawlings-Blake would to fill any budget hole caused by the loss in tax revenue. Right now, the state collects the money and sends it back to the city.
Sen. Bill Ferguson, a city Democrat, called the legislation a "promising lead."
"The idea is a novel concept to address a critically important problem in the city," he said. "We have way too many neighborhoods where families have to travel way too far to purchase the ingredients for a healthy meal.
"In the tight financial times we're facing in the state, it all comes down to the money and what money is available," Ferguson added. "The biggest challenge will not be the concept, but the available resources."
Councilwoman Mary Pat Clarke said she hopes the legislature allows the city to take action. She thinks it could help attract more stores to her North Baltimore district.
"I would like to see more decent food opportunities along Harford Road instead of just bars, bars, bars," she said.
Clarke said she also supports the administration's push to add more protections for residents at risk of losing their houses to tax sales by raising the minimum amount due to trigger a sale to $500.
"It's only a couple of hundred dollars, but it's funny what a difference that makes in a lot of cases," Clarke said. "It means that more people will be able to save their homes, I know that. I am talking about low-income homeowners whose debts are usually very minimal."
In a tax sale, the city sells a homeowner's debt to an investor who then attempts to collect the debt plus interest from the homeowner. If the homeowner fails to repay the debt plus interest, which can grow to thousands of dollars with court costs and legal fees, the investor can foreclose on the property.
Critics argue the tax sale system enriches investors and can force vulnerable residents from their homes for a relatively modest amount of debt.
The legislation includes a number of provisions designed to protect homeowners. For example, it would allow the city to require investors who purchase homes at tax sales to offer payment plans to homeowners. Investors also could be made to wait a year, rather than the current six months, before asking the court to foreclosure on a property. The proposal also calls for additional notifications for homeowners.
It also authorizes the council to effectively lower the interest rate investors can charge homeowners by tying it to the prime rate.
To complement the legislation, city officials would hire a tax sale ombudsman in the next fiscal year to oversee the process that's often complicated and confusing for homeowners, said Kevin Harris, a Rawlings-Blake spokesman. The ombudsman would coordinate agency efforts to intervene earlier through easier-to-understand mailings and other measures.
"We have known the issue of tax sales has hurt vulnerable residents," Rawlings-Blake said. "I think this will help keep people in their homes."
City officials did not provide an estimate on the number of homeowners who could be helped by the proposed changes in the law.
The legislation was prompted, in part, by a study by the Abell Foundation.
Joan Jacobson, author of the Abell report, said while the protections would be welcome, she thinks the city should seek to raise the threshold to an even higher amount and block the city from being able to sell properties for unpaid water bills. In other places, including New York City and Washington, homes cannot be sold at a tax sale for unpaid water bills.
"A lot of elderly, a lot of low-income homeowners, are losing their homes because of water bills," she said.
Jacobson said she does like the idea of an ombudsman.
"The whole system is confusing and it's complicated for even lawyers to figure out," she said. "This is a step in the right direction."
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