Officials defy state tax rate ad rules Commissioners object to announcing raise caused by assessment


Spring is often a time of wincing for the elected leaders of Maryland's counties and municipalities.

That's when the state requires them to run advertisements in large print saying that they are proposing to raise property taxes -- even if they're not proposing to do so officially. In the eyes of the state, any increase in property tax revenue -- even if it's caused by rising property assessments -- is a tax increase. And according to state law, it must be advertised as such.

Local officials usually run the state-mandated ad begrudgingly, often burying it deep inside a local publication, hoping most taxpayers won't see it. But in tax-sensitive Carroll County, where all three county commissioners are seeking elective office again this fall, they decided to fight back.

They ran the state ad, announcing, in type large enough that no one needs glasses to read it, "The County Commissioners of Carroll County propose to increase property taxes."

But they also paid for an ad of their own to run at the same time, declaring in equally large type that "the language required by the state generates much confusion among our citizenry" and that "despite the confusing language in the below notice, the Carroll County Commissioners are not [with "not" underlined] raising the property tax rate."


The state is touchy about its ads. The 21-year-old law requiring the ads says they must occupy a quarter-page, use a specific typeface and follow state wording exactly.

And just to make sure nobody pulls a stunt like the Carroll commissioners', each jurisdiction must send the entire page on which the ad appeared to the state Department of Assessments and Taxation.

Right to express opinion

When state officials got the Carroll page, they were not happy. They asked an assistant attorney general to call the Carroll commissioners and tell them to run the state ad again without the commissioners' "explanatory note."

But after meeting with their lawyer, the commissioners decided to let their act of defiance stand -- no rerunning of the state ad, no apology, not the slightest hint of admission that they might be trespassing on the state's bailiwick.

"We have a right to express whatever opinion we want," said Commissioner W. Benjamin Brown. Colleagues Donald I. Dell and Richard T. Yates agreed.

Inflation inspired ad law

The ad law affects every municipality and county in Maryland. It had its genesis in 1977 when the General Assembly enacted a "constant yield" law at a time of rapid inflation.

Property values in many parts of the state were increasing by double digits each year, and state assessments followed suit. As a result, homeowners paid hundreds of dollars more in taxes each year even though the property tax rate remained unchanged.

Counties and municipalities, which do not share their property tax revenues with the state, were "reaping windfalls" from the increased assessments on the one hand while blaming the state on the other, Ronald W. Wineholt, state director of assessments and taxation, said.

In 1977, state legislators got tired of hearing local officials tell residents they were powerless to change the situation and then blame state officials for allowing appraisers to increase the assessed value of houses, Wineholt said, so they devised a law to make local officials "accountable."

Constant yield

If local officials were serious about lowering taxes, they could lower the tax rate to a level that would offset the increase in assessed value, state legislators said. That level was called the constant yield.

But if local officials chose to keep the tax rate the same and use the millions of dollars generated by higher assessments, they would have to admit they were raising taxes, legislators said.

The law, which was amended in 1990, is specific. It requires every jurisdiction expecting to receive property tax revenues above the constant yield to publish a "notice of a proposed property tax increase" in a local newspaper, giving the time and date of a public hearing on the proposed increase.

The law does not forbid "explanatory notes" from accompanying the ad, but those "notes" must follow the law, Wineholt said.

Charles County precedent

Carroll officials copied most of their note from one used in Charles County last year. The Charles commissioners felt the note was necessary, said Richard Winkler, the county's chief financial officer, "because of the complaints they were getting from all over" about raising taxes.

So, they published "an explanatory note."

The Department of Assessments and Taxation was not pleased.

"We asked them, 'Please don't do it again,' " Wineholt said. "The law does not preclude an explanatory note, but it can't be done in such a way that it undermines the law or is misleading. We exchanged language [with the Charles County commissioners] that would be acceptable."

That has not been the case in Carroll, Wineholt said. Carroll officials "did not talk with us in advance" before running what Wineholt sees as a "competing ad."

The Carroll commissioners' ad "raises a question in our minds about whether they are undermining the intent of the General Assembly law," Wineholt said.

State could reduce rate

So what is the state going to do?

Assistant State Attorney General David M. Lyon didn't say, but he was willing to speak in general about the required ads.

"The worst-case scenario" when a county or municipality refuses to comply, he said, "would be to roll back the tax rate" to the constant yield -- something that has happened with a couple of recalcitrant municipalities once or twice in 20 years, he says.

If that happened in Carroll, the property tax rate would drop from $2.62 per $100 of assessed value to $2.55 per $100 of assessed value, and the county would lose an estimated $2.5 million in revenue.

In Charles County, the county commissioners this year attached an explanatory note to the state ad in a typeface radically different from the state ad to set it off.

The Carroll commissioners had used the same typeface for their note.

The Charles ad also had a softer tone: "The county commissioners are not proposing an increase in the tax rate," the ad said. But "The state considers this a tax increase because property tax revenue will increase. The county will raise more property tax revenue than last year and must therefore publish" the state ad, it said.

Pub Date: 5/07/98

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