Harford County Bill 17-021, which gives property tax credits to retired military veterans 65 and older and senior citizens who have lived in the same house for at least 40 years, was signed into law by County Executive Barry Glassman Friday.
Glassman sponsored the legislation. County Councilman James McMahan signed on as a co-sponsor after the legislation was introduced on Oct. 17.
The County Council passed the legislation on a 5-1 vote Dec. 5.
Councilman Mike Perrone cast the lone negative vote; Councilman Joe Woods was absent.
Perrone stressed that every tax credit, whether for good or bad, “is a subsidy.”
“Whenever we say we’re going to give a credit to someone, we have to remember that someone else is paying for that credit,” he said.
The bill, which grants a 20 percent credit over five years to those eligible, is in line with state legislation that took effect in June 2016. The Harford credit will take effect July 1, 2018.
Local bills must grant the credit to retired military and 40-year residents, in accordance with state law, although the amount of the credit and the time it’s in effect are flexible, County Attorney Melissa Lambert advised the council during a Nov. 21 public hearing.
County administration officials estimate the credit will cost $1.9 million in lost revenue, and they plan to make that up by eliminating a 1 percent to .5 percent discount for people who pay property taxes early. That policy takes effect July 1, 2019.
The inflexibility on who can benefit and the elimination of the discount, were two major sticking points for Perrone, who said he would have probably voted for the bill if it only provided the tax credit for veterans.
But he also called eliminating the discount “a tax increase one everyone who has in the past opted to pay their tax bills early.”
Perrone said the credit for homeowners hurts renters and lower-income people who move more frequently than wealthier people.
“This provision essentially sets up a regressive tax structure where the poor stand to pay more to subsidize those who are wealthier,” he said. “That’s just bad policy.”
McMahan said Perrone made “some very good points,” but he disagreed on others.
He said the money he set aside when planning for retirement and tax bills “is slowly but surely being eaten away, and I’m very glad to see some kind of a tax relief for veterans.”
“The county executive used every part of the state’s bill, to its fullest, to give breaks at every level to our veterans and our seniors,” he said.
McMahan expressed his support for credits for long-term residents, noting “people who have lived in one county a long time and have provided service in so many different ways deserve a chance to age in place.”
“It’s far from a perfect bill, but I think it is a start and I have to, in that regard, support it,” he said.
McMahan also suggested the state’s tax credit for disabled veterans should be “tweaked,” so more people can get covered. He expressed concern about what would happen to the spouse of a disabled veteran when that veteran dies. He also suggested a credit for public safety personnel.
“More veterans in the legislature need to be proactive on this with the governor,” he said.