In what has become a January ritual, Anne Arundel County homeowners are fretting and complaining about a recent round of state assessments that drastically increased land values in northwestern neighborhoods once considered solidly middle class and affordable.
Longtime homeowners worry about growing property tax bills while community leaders say skyrocketing home values - assessments rose an average of 48 percent over the past three years -have made many neighborhoods unaffordable for teachers, firefighters and police officers.
"Everybody I've talked to is quite upset about it," said Don Yeskey, a Crownsville resident and president of the Generals Highway Council of Civic Associations, which includes many of the areas assessed.
But most Anne Arundel property owners gain the increased equity without having to worry about a large tax increase because the county limits the amount of additional revenue it can collect from property taxes - commercial and residential, minus new construction - in a given year. The county also limits to 2 percent annual increases in the taxable value of property for residents who remain in the same home.
"For folks who aren't changing residences, the assessments really don't make a big difference in property taxes," said county finance chief John Hammond.
The new assessments cover the northwestern quadrant of the county - an area that includes Brooklyn Park, Glen Burnie, Odenton, Crownsville, Hanover and Jessup. In many neighborhoods, houses previously assessed at $250,000 are now assessed at $400,000 or more.
The state reassesses a third of the county every year. Last year's assessments covered the northeastern part of the county, and next year's will cover Annapolis and the southern half.
Montgomery County led the state with an increase of about 66 percent over three years, but Anne Arundel and Howard counties continue to be the hottest real estate markets in the Baltimore metro area. Baltimore and Harford counties' assessments were up an average of 38 percent and Carroll County's rose an average of 42 percent.
Rapidly rising home prices have become familiar in Anne Arundel, which often produces a majority of the most expensive sales in the Baltimore area in a given week. For years, luxurious waterfront homes drove the county's real estate market, but recent assessments show that rapid increases have hit in all areas and all price ranges.
"It's a regionwide boom," said Joseph Glorioso, supervisor of property tax assessments for Anne Arundel. "In a lot of cases, it's the lower and middle market that's driving the increases. It's pretty shocking what you see out there."
Housing serving the growing market around Fort Meade and the National Security Agency's headquarters is just as hot as riverfront property in the Annapolis suburb of Crownsville. And Glorioso said early signs are that next year's assessment will produce a similar increase.
"It just doesn't look like it's slowing down any," he said.
State officials study market trends and physical improvements in determining changes to a home's assessed value.
Homeowners experience sticker shock when they see the new assessments, assuming that their property tax bills will skyrocket.
Slightly more than a year ago, Joe Garrison paid about $250,000 for a townhouse in the sprawling Piney Orchard development. He was stunned to open his tax assessment earlier this month and see that the property was valued at $306,000.
"I was absolutely shocked," the financial planner said. "I knew homes were selling for a lot in the area, but I had no idea my assessment would come in at that amount."
Garrison also didn't realize the county limits annual increases to the taxable value of the property. After hearing about the cap, he said, "That seems a lot more fair."
County officials struggle every year to keep residents up-to-date on tax law.
"Yeah, I think there's a fair amount of confusion out there about the whole issue of property taxes," Hammond said.
Owners who remain in their homes are largely protected from tax increases. The assessed value of a house might have risen from $200,000 to $450,000 over the past 10 years, but an owner who remained in the same house for the entire 10 years would be paying tax on a $244,000-valued house this year. That would mean an approximately $400 - or 20 percent - increase in property tax between 1995 and 2005, even though the home value would have increased by 125 percent.
Though such increases are significant to some, county officials believe the 2 percent annual assessment increase limit keeps most residents from being taxed out of their homes. Del. John R. Leopold, an Anne Arundel Republican, said outdated language in the tax laws leaves some elderly homeowners unprotected by the cap. He is sponsoring legislation in the General Assembly that would fix the problem, he said.
The county also uses a revenue cap, passed by voters in 1992. The amount of revenue the county collects from property taxes cannot grow from one year to the next by more than either the Consumer Price Index or 4.5 percent, whichever is lower. Revenue from new construction is excluded.
That means that in many years, including last year, the county actually lowers its property tax rate, which stands at 94.1 cents per $100 of assessed value. Hammond said that with land values continuing to rise, this year probably won't be much different.
"I'll be very surprised if the formula allows for an increase to the tax rate this year," Hammond said.
County and school officials have complained that the tax cap denies them a revenue source that could be used for school construction and other critical spending needs.
Though homeowners gain equity and borrowing power from the increased assessments, many say there are problems created by rising assessments.
County leaders have spent much of the last year discussing a shortage of "workforce" housing for teachers, police and firefighters. The County Council could not agree on a solution last fall, but most members agreed that the problem is real.
Others say the hot market attracts buyers who are less likely to stay put for decades.
"Our community has suffered because a lot of the buyers are more transient," said Yeskey, who moved to Crownsville in 1959. "We've always wanted to keep the area very rural, and we've been successful. Consequently, it's become very attractive to people with money."
Property owners have until Feb. 14 to appeal their assessments. The department gets about 3,600 appeals a year out of the 60,000 properties it assesses. About one-third of those appeals result in some adjustment, assessment officials say.