Baltimore City Council expected to approve new tax credit for low-income seniors

The Baltimore City Council is poised to approve a new property tax credit for low-income seniors — a move council President Bernard C. "Jack" Young argues is only fair in a city that subsidizes the projects of wealthy developers.

But the city finance department is opposing Young's bill, saying it creates a complicated bureaucracy that will cost Baltimore as much as $4 million annually.


"The Department of Finance anticipates this tax credit will create additional complexity and further delay an already complicated real property tax billing process," William Voorhees, director of revenue and tax analysis, wrote in opposition to the legislation.

"In light of these complexities and when combined with the additional cost of the credit itself and the cost of the additional labor required to accommodate it, the Department of Finance opposes" the bill.


The council is expected to approve the legislation at its meeting Monday.

The city for years has focused on luring new residents and developers, but Young says it's time to reward longtime residents. His bill provides a tax credit for Baltimore homeowners who are at least 62 years old, have owned their homes for at least a decade and have an annual income of less than $40,000.

The credit, which varies depending on a homeowner's income, would supplement the state Homeowners' Property Tax Credit Program. Thousands of Baltimore seniors would be eligible to save hundreds of dollars if Young's bill becomes law.

More than 17 percent of seniors in Baltimore live below the poverty line.

Despite her finance department's objections, Mayor Stephanie Rawlings-Blake said this week she will sign the bill if the council passes it. Even so, she said she was concerned that the tax break is coming at a time when she and the council are fighting over the $4.2 million some council members want budgeted for after-school programs and community schools.

Young and council budget chairwoman Helen Holton have pledged a government shutdown if the mayor doesn't restore the money, which was allocated in the current fiscal year's budget but not included in the spending plan for the year that begins July 1. The money funds after-school programs for about 2,500 students.

"At the same time we're squabbling over this $4.2 million, they don't have any reservations about adding potentially $4 million more to the bottom line," Rawlings-Blake said of the tax credit bill.

Voorhees wrote that there are 6,256 properties in Baltimore that would be eligible for the extra credit. Young said the proposal is intended to stabilize communities by helping seniors avoid foreclosure and stay in their homes.

A senior with an annual income of $25,000 who, after the state credit is factored in, pays $1,770 a year in property taxes would save an additional $380 under Young's proposal.

Young called the finance department's objections to the bill "crazy" and suggested they were motivated by personal hostility.

He noted that the city has frequently approved tax breaks and subsidies to spur development in Baltimore, including payments in lieu of taxes, Enterprise Zone designations, apartment tax credits and tax increment financing deals. The city is currently considering Sagamore Development's request for a record $535 million TIF to redevelop Port Covington.

"Anything that I put in, they fight," Young said. "If they don't want to do this for seniors, then that's on them. We can do things for developers. Why can't we get one for our seniors?"


Young said some of the poorest retirees in Baltimore are those who used to work for city government.

"I can't understand why they would fight a tax break for seniors," he said.

Holton said she stands with Young in backing the proposal.

"We have a responsibility to be balanced in our approach and represent all the citizens, not just the well-to-do," she said. "It is those who are less well-to-do that carry the heavier burden."

Daniel T. Ellis, director of Neighborhood Housing Services of Baltimore, supports the legislation. Ellis said he is in frequent contact with city residents who are at risk of losing their homes to tax sales, and he believes a little extra money can go a long way.

Ellis said 13 jurisdictions in Maryland already have similar tax credits.

"Having worked with many low-income homeowners struggling to afford to remain in their home, we have found a tremendous benefit from the State Homeowner Property Tax Credit," he wrote in a letter supporting the bill. "Having the local supplement available in Baltimore would provide significant assistance to the most vulnerable seniors in our community."

Ellis said the costs to the community from seniors losing their homes are immense and the city is wise to take steps to avoid such hardship.

"Additional demands are placed upon currently strained social service systems providing senior living environments and other social supports required because the homeowner has been displaced," he wrote. "The cost to the city is significantly more than the $380 that it costs to help them remain in their home."


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