Three of Howard County's five council members are proposing to reduce the local residential assessment cap to 4 percent from 5 percent, the second property tax cut suggested this election year.
The assessment cap idea comes from council Chairman Christopher J. Merdon, an Ellicott City Republican, Charles C. Feaga, a western county Republican, and David A. Rakes, an east Columbia Democrat. If approved, the legislation would save the owner of a median-priced, $450,000 home about $46 a year, budget officials said - but not until July 2007 when the change would take effect.
It would cost the county treasury an estimated $3.8 million a year. Assessment caps limit the taxable value of a home, despite sharply higher sales prices.
County Executive James N. Robey, who pushed through a 30 percent income tax increase that took effect in 2004, announced Jan. 12 that he will seek a 3-cent cut in the property tax rate. If approved, it would save the owner of that same $450,000 home $135 a year in taxes, while costing the county $9.4 million annually in revenue.
Lowering the assessment cap represents "more truth in taxation because the county government collects more in taxes each year without increasing the [tax] rate," Merdon said. The leader of the new County Council majority said he would look at Robey's proposal at budget time. But said he might prefer to cut the income tax rate.
"The council has the final say on the tax rate. We will take the executive's proposals into consideration," he said.
If Howard enacts the assessment cap change, it would join Baltimore and Baltimore County at the 4 percent limit. Anne Arundel, Prince George's, Talbot and Worcester have lower caps, while nine Maryland counties are at the maximum 10 percent cap.
The measure is due for introduction at Monday's council meeting. Two members, west Columbia's Ken Ulman and North Laurel-Savage's Guy Guzzone, both Democrats, were noncommittal on the idea. Ulman also is a candidate for county executive.
Feaga said he favors both property tax and assessment cap reductions, partly because they would take place in subsequent years, which would give the new executive and council time to consider the impact over a longer time.
"Any tax reduction is good," Feaga said, adding that he did not want to put the new administration in the position of having to raise taxes. "I do think we have to be very careful in an election year."
The fiscal conservative said he suspects that with revenues rising in a good economy, "we may have overtaxed." The county recorded a $20.4 million surplus for the fiscal year that ended June 30.
Rakes described the bill more as a bargaining tool in discussion with Robey.
"We want a bill in, and we'll work it out one way or the other," he said. "What I want to do is see if we can't improve communication between the executive and the council."
Guzzone said he would consider the idea, but Ulman expressed reservations.
Merdon said he might like to cut the local income tax by an unspecified amount, legislation that he could introduce after Robey proposes his annual budget in mid-April.