State mistakenly revives erroneous property tax breaks

Baltimore Circuit Court Clerk Frank M. Conaway Sr. reacted with disbelief upon hearing that an illegitimate tax break was inexplicably on the property tax bill for a rental home he owns in Northwest Baltimore — again. "No, it's not," he insisted recently to a reporter.

Yet there it was, in black and white: City records showed Conaway wrongly received a $396 homestead credit on the house for the current tax year, which started last July.

Conaway thought he'd resolved this issue for good. In late 2011, state officials revoked several years' worth of credits on the same house after The Baltimore Sun reported that he didn't qualify. An individual is entitled to only one homestead credit, and it must be the person's principal residence. He later repaid the city $3,640, saying he didn't know he'd been getting discounts on the rental.

At the time, both the state officials who grant credits and the city officials who issue tax bills agreed that Conaway shouldn't have received the breaks. The Sun found that hundreds of other property owners were getting improper credits on rentals or otherwise non-owner-occupied houses. Many owners said they were unaware of the discounts.

Now, once again, Conaway isn't alone. At least two other city homeowners received back-from-the-dead credits this tax year, even though, like Conway, they didn't seek a break and the state had yanked discounts from prior years, officials confirmed. Those credits have since been rescinded, and revised tax bills sent out.

In addition, state Department of Assessments and Taxation staff recently identified several city homes whose status was wrongly changed from nonprincipal to principal residence. Those owners saw no tax break, however. At least one is vacant.

How did all this happen? "Two systems are used to process changes," said Owen C. Charles, deputy director of the assessments agency. "It appears we made the changes to the city's tax billing system for the prior years but didn't carry the update through for the current year to the department's records."

Conaway said he was "shocked" to learn of this year's $396 credit and promptly wrote the city a check.

To Matt Gonter, a longtime property tax activist from Patterson Park, the situation is frustratingly familiar. He says he often sees — and dutifully reports — homestead credits improperly granted on rentals, vacants and LLC-owned properties. Each one deprives the city of rightful tax dollars.

"I'm surprised things are still not corrected," Gonter said.

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