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Commissioners battle over lowering Homestead Tax Credit cap

Two Carroll County commissioners' attempts to reduce the cap on Maryland Homestead Tax Credit without input from incoming members of the board of commissioners and outside of the annual budget process were defeated.

The Homestead Tax Credit limits the increase in taxable assessments each year to a fixed percentage. The Carroll County Board of Commissioners voted, 3-2, Tuesday to reject separate proposals to lower the cap from 5 percent to 3 percent, and then from 5 percent to 4 percent.

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Commissioners Robin Bartlett Frazier and Richard Rothschild voted in favor of lowering the cap to reduce the property tax burden on homeowners. Frazier claimed that members of Carroll's middle class were on the brink of losing their homes in order to cover taxes.

While they were pushing to lower the cap by 1 or 2 percentage points, Frazier and Rothschild said they would rather have the cap for increases set at zero. But since they were sure other members of the board wouldn't vote for it, Frazier and Rothschild said they settled on proposing decreases in the cap of 1 and 2 percentage points.

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Commissioners Doug Howard, Dave Roush and Haven Shoemaker all argued against lowering the cap, but for varying reasons.

Howard, R-District 5, said the county could not afford to lower the tax because it is already struggling to maintain and improve its infrastructure. Carroll needs money to pay for upgrades to roads, water and sewer lines, buildings and facilities, as well as utilities, he said.

Ted Zaleski, director of the county's Department of Management and Budget, said the county would need to stop paying for something — whether it be a service, program or personnel — to make such a decrease in revenue work. If the cap were lowered to 3 percent, Zaleski said the county would be put "in an ongoing struggle to make the budget work." The county is already straining to meet current requirements, he said. Lowering the cap would only exacerbate the problems.

Zaleski said he couldn't give exact numbers as to how much tax revenue the county would lose if the Homestead Tax Credit cap were reduced because it depends on fluctuations in property assessments. Maryland properties are reassessed by law once every three years. The amount of money the county would lose by lowering the cap would be much different if properties were reassessed at a higher values rather than if the values remained flat, he said.

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Shoemaker, R-District 2, said the new board of commissioners that takes office in December should be in charge of making the decision as to whether to lower the cap. The new board, which will likely have at least three new commissioners, should not be hamstrung by the current, lame-duck board's decision, said Shoemaker. Shoemaker will not be on the board in December.

By lowering the cap, Shoemaker said the current board would put the new board in the position to have to raise taxes to pay for county services.

Roush, R-District 3, said the decision to lower the cap has long-term implications involving millions of dollars. The new board, he said, should make the decision, not the current board.

Howard also argued a decision of such magnitude should be made during the board of commissioners' annual budget process. That way, Howard said, the board would have access to information from staff, have time to consider options, debate and give citizens a chance to weigh in.

Howard also mentioned that Frazier has proposed lowering the cap in previous budget sessions, but those proposals they failed by majority votes of the board.

There is no reason to try and lower the cap now and not wait until the new board takes office, Howard said. The only reason to do it now, he said, is for political grandstanding.

Frazier said she brought up the issue because any decreases in the cap would have to be approved by Nov. 15 to affect future property assessments.

When asked why she didn't want to wait until the next board takes office, Frazier responded, "Because delay is death."

Reach staff writer Christian Alexandersen at 410-857-7873 or christian.alexandersen@carrollcountytimes.com.

What is the Homestead Tax Credit?

To help homeowners deal with large assessment increases on their principal residence, state law has established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10 percent or less each year.

Source: Maryland Department of Assessments and Taxation, http://www.dat.state.md.us/sdatweb/homestead.html

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