TAX REVENUE CAP DEBATE CLOUDED BY DIFFERING PROJECTIONS

THE BALTIMORE SUN

The debate over capping county property tax revenues turned surreal in Anne Arundel County last week, when combatants who once spoke of revolution or anarchy were reduced to arguing over pennies.

Proclaiming himself a "messenger of confusion but not the confuser," Deputy County Attorney David Plymyer issued an informal legal opinion that could render a proposed charter amendment virtually meaningless to homeowners' tax bills and county coffers. Amendment language placing the cap in the context of the constant yield will allow more revenue growth through taxes on new construction than the county has previously estimated, he said.

If Plymyer's interpretation stands, it would invalidate many assumptions made in the month since the state Court of Appeals struck down a ballot petition to roll back property tax revenues to 1989 levels, but upheld a provision to limit future property tax growth to 4.5 percent or the rate of inflation, whichever is lower.

Eventually, even if voters approve the measure appearing on the ballot Nov. 6, its meaning and impact probably will be determined by the same court that wrote it.

But a forum Thursday night proceeded amid much booing and applause -- as if the people will decide the ultimate fate of the initiative originally drafted by Anne Arundel Taxpayers for Responsive Government.

Seven months ago, AATRG President Robert Schaeffer launched a petition drive to roll back property tax revenues to 1989 levels, based on the group's proposition that "people become pawns of professional politicians who have learned to manipulate the system for goals and ends which have nothing to do with the best interests of the people who elected them."

Even after the Court of Appeals decision, Schaeffer insisted that his amendment would overturn the existing tax structure and force fiscal discipline on county officials.

By Thursday night, AATRG spokesman Mac Greeley was saying his group's measure is worth passing even if it produces less than $10 a year in savings to the average homeowner.

But if Plymyer is wrong and the county eventually faces a threat to education and other services, Greeley reassured the 150 people gathered at Our Shephard Lutheran Church in Severna Park that the County Council could always find other ways to tax.

Robert Kramer, a former state delegate, said Plymyer's opinion would mean that the AATRG proposal is "much ado about nothing, signifying nothing in the guise of meaningful tax relief."

A week earlier, speaking on behalf of Fairness to All County Taxpayers, a group opposed to the tax cap, Kramer had repeated the county's warning that the measure could cost $118 million in anticipated revenues over the next five years. Such a loss would cripple environmental programs, he said.

He urged voters to decide based on the "worst-case scenario" and tried to limit debate to whether citizens value their county services.

Discussion was thrown back to Schaeffer's original argument over government waste. Kramer found himself in a no-win discussion of a property tax system that allows county tax increases to creep in the back door created by rising state property assessments.

Tax-cap proponents were more concerned about being taxed out of their homes. Many hissed and laughed when AATRG opponent George Shenk said, "Because we live in a humane society, people do not lose their homes when they cannot afford to pay taxes."

Schaeffer countered that the state tax credit applies only to people "virtually on their knees and dirt-crawling poor" who live in homes assessed at $60,000 or less. The average county home is assessed at $109,700.

Any semblance of informed discussion broke down when Kramer disputed an audience member's claim that his tax bill went up 20 percent last year.

"That couldn't happen," Kramer said, attempting to explain that state law limits annual assessment increases to 10 percent.

Kramer was wrong on two counts, as he later realized: The man's last tax bill fell under a 15 percent cap because the General Assembly passed the 10 percent rule only this year, and assessment increases kick in in three-year cycles, meaning a homeowner's property value can take more than a 45-percent leap over the previous period.

When voters cast their ballots on the proposed charter amendment, their minds will be crowded with equal measures of the anger, confusion and ignorance that have shaped the debate.

The anger has built for months between citizens who believe their tax dollars have been squandered and their neighbors, who fear the measure would undermine cherished county services.

Over the next 16 days, advocates and opponents will continue blaming each other for the confusion and ignorance that burden the voters. But there is blame enough to share abundantly, as both sides continue making assumptions and dubious claims about how the tax cap would work.

One thing is certain: The voters have been poorly served by AATRG's efforts to convince them, bureaucratic experts who advise them, the elected officials who represent them, the political candidates who hope to serve them and, not least, the media who presume to inform them.

The county Budget Office last week said Plymyer's assumptions mean the $2.46 property tax rate would drop no more than 2 cents, instead of the 10 cents it projected last month. Likewise, the loss of revenue over five years would be only a fraction of the $118 million originally estimated.

Budget director Marita Brown attributed those original numbers to taking Schaeffer "at his word," referring to press accounts and his original claims of a 20 percent tax cut -- when AATRG was still pursuing a roll back to 1989 tax revenue levels.

"The fact that there seems to be some confusion about what (the amendment) would do is no fault of ours," Schaeffer said in church Thursday night. "The county has had since April to read this amendment."

He cited AATRG's written material and the official language of the original and amended charter amendments, which have always refered to the constant yield.

In fact, during an interview with this paper in January, Schaeffer demonstrated that he understood the effect of the constant yield and the possibility of revenue growth through taxation of new construction.

He spoke in terms only of limiting taxes on the existing assessable base and said his measure would force the county to choose between cutting spending and "doubling the tax base within seven years."

"And the only way to do that," he warned, "is to invite in every developer in the county and let them pave Anne Arundel County."

But confusion reigned even six months ago, when AATRG originally estimated the roll back would produce a 56-cent tax rate cut and about $37 million less in revenues. The Budget Office, assuming the 56-cent cut, countered that revenue loss could exceed $50 million.

It took a county challenge of the measure in Annapolis Circuit Court to produce an estimate of about $29 million in lost revenues.

But Schaeffer never generated any figures of his own after the Court of Appeals decision in response to the $118 million projection.

Neither county officials, political candidates nor the media considered how the constant yield would affect the measure.

Such failures on everybody's part will leave the voters to decide an issue that nobody fully understands.

Voters should consider one last bit of confusion before they enter the polls. Both Schaeffer and Plymyer warn voters not to believe the charter proposal as it appears on the ballot.

In wording that Plymyer approved, along with Circuit Court Judge Bruce C.

Williams and lawyers representing AATRG and the Board of Supervisors of Elections, the charter amendment summary reads: "The County Council may set an annual tax rate that exceeds the constant yield tax rate by 4.5 percent," or the previous year's rate of inflation.

The ballot directly contradicts the Court of Appeals order, which explicitly says the council may not set a tax rate above the constant yield that exceeds the proscribed limit. The court order, not the ballot language, has the force of law.

"Obviously, to understand something of this magnitude, one has to do a lot of studying," Plymyer said. "I don't think anybody can have any hope of voting intelligently based on the 100-word ballot summary."

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
72°