A study committee's proposal to decrease Baltimore's property tax rate but make up for lost revenue by increasing the cap on assessed home value, among other options, evoked negative reactions from dozens of city homeowners at a hearing last night.
The proposal to lift the annual cap on the increase in assessments on principal residences, known as the Homestead Tax Credit, from 4 percent to 10 percent seemed to worry homeowners most, especially those who bought houses before the local real estate market peaked.
Income from the tax-cap increase would bring in an additional $24.2 million in revenue, according to the committee, money that could then be used to offset a roughly 4 percent reduction in the property tax rate.
Baltimore's property tax rate, which the committee proposes to eventually cut by 11 percent, is the highest in the state. Residents said they worry that if the values of their homes continue to climb, they could still pay more.
"Please do not price us out of our home and the city," said Julius Eldridge, 71, a longtime resident of the Evergreen neighborhood. Eldridge said he and his wife bought their home in the 1970s and stayed in the city when their friends moved to surrounding jurisdictions. He said it would be wrong to penalize homeowners who stuck by the city for so long.
"New homeowners are willing to pay [higher property taxes] because our community is extremely desirable," Eldridge said. "But the cap is what allows us to continue to live in the city."
The Committee on Taxes and Fees, which was convened last year by Mayor Sheila Dixon, worked for months to figure out a way to decrease the city's property tax rate from $2.268 per $100 of assessed value to about $2 per $100 of assessed value in the next few years.
The city's tax rate is more than two times the rate in surrounding jurisdictions, a situation that many officials say has retarded city growth and revitalization.
"What we have done is, for the first time, articulated a goal and a strategy to reduce the property tax," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors and co-chairman of the committee with city Comptroller Joan M. Pratt.
Landers told the gathering of residents at the Polytechnic Institute auditorium that the committee's report contained ideas to reduce the property tax, many of which he said could take years to execute or would require action by the state legislature.
Pratt also addressed residents and encouraged them to speak frankly.
"We explored a number of different scenarios, and our work so far has not been easy," she said.
Several City Council members also attended the hearing. They will consider the proposals next.
Bernard and Beverly Wallace, residents of the Glen neighborhood, also attended the hearing. "I just have to wonder how much more money can come out of my pocket," said Beverly Wallace, 63. "You stick it out in the city so long. Now the house is paid off, and we are on a fixed income, but I feel like I am still making a mortgage payment."
Adam Meister, who started a group that encourages homeownership in depressed areas of the city, said he worries that the proposals, if approved by city officials, could reverse a trend of increased homeownership in the city.
"City Council members say they want to attract people to the city, but that won't happen if it costs insane amounts of taxes," Meister said.
To reduce the property tax rate and increase the base of taxable property, committee members have offered more than a dozen recommendations, including increasing the city income tax, using money from casino gambling, raising the tax on hotel rooms, increasing fees and fining owners of vacant buildings. Even if all of the recommendations are approved by the City Council, the city's property tax rate will still be the highest in the state.