A bill that supporters say would put "truth" in Maryland's property tax system without changing the amount people pay passed the House of Delegates yesterday.

Critics suggest the legislation will lead to higher taxes, and the bill's fate in the Senate is uncertain.

Under the bill, which passed 100-38, local governments would no longer tax residential and business properties on 40 percent of their assessed value. Property would instead be taxed at 100 percent of its value, and local tax rates would be cut to 40 percent of what they are now.

The result would be that people would pay the same amount in taxes, but their tax rate would be lower. Supporters, including House Speaker Casper R. Taylor Jr., say that would boost Maryland's image in national rankings, possibly helping attract more businesses.

"Our property tax rates look unusually high," said Del. John Adams Hurson, a Montgomery Democrat. Hurson called the bill, sponsored by Prince George's Democratic Del. Anne Healey, an "economic development tool."

Opponents, distrusting local governments, say that once tax rates were reduced, counties would be tempted to raise them again.

"Passage of this bill opens a can of worms," said Del. A. Wade Kach, a Baltimore County Republican. "I really believe that it would result in higher property taxes."

The same debate took place two years ago, when the bill passed the House by a similar margin but died in the Senate.

As in 1997, talk show hosts at WCBM radio helped fuel the debate, branding the bill a tricky way to raise taxes.

"This is one of those sneaky legislative agendas to raise more revenue, to have more spending programs that are unnecessary," said host Zoh Hieronimus.

Part of Hieronimus' argument is that because tax rates would be based on 100 percent of property values instead of 40 percent, the cost of a one-cent increase in the property tax would be 2 1/2 times as much. "It will be an extraordinary new revenue generator," she said.

Supporters of the bill say such rhetoric irresponsibly stokes the anger of taxpayers.

"This is fear and confusion being spread by one radio station in this state," Hurson said. "Property taxes are not going to go up if you pass this bill."

Some opponents also argued that the legislation is unnecessary. They pointed out that 15 states tax 100 percent of property value and suggested that businesses considering a move are sophisticated enough to figure out that Maryland's rates are based on 40 percent of property value.

"To say that a company isn't going to come to Maryland because they don't understand the way we do our taxes is hard to understand," said Del. Robert L. Flanagan, a Howard County Republican.

Healey is hopeful that the legislation has a chance in the Senate this time in part because the next election is three years away. By then, she argues, people will realize that their property taxes didn't go up because of her "truth in taxation" bill.

Angry telephone calls have begun coming in to the Senate Budget and Taxation Committee, where the bill will be heard.

Pub Date: 3/13/99