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Too many ideas are 'off the table' in Baltimore

Baltimore property taxes are too high for the city's own good.
Baltimore property taxes are too high for the city's own good. (Getty Images)

During a past mayoral election, I learned an important lesson following a local radio interview. My book on urban revitalization was just out, and I was quizzed about my argument that if impoverished cities like Baltimore want healthy economies for their residents, they need to encourage investment — and that a necessary condition for doing so is a property tax rate that is competitive with those of rival jurisdictions.

Naively, I didn’t think this was a tough case to make. Baltimore City’s property tax rate is more than double that in the surrounding county, and its public services are, to put it gently, no better. In business, if you’re selling, say, Big Macs for twice as much as your competitor down the block sells Whoppers, you know you’ve got a problem. You either solve it or you’re done.

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But I made no progress that day. My interlocutor’s frown deepened especially when I argued that a competitive tax rate would help re-populate the city and expand its tax base. I pointed out that cities like San Francisco and Boston — which both lost population and jobs at rates similar to Baltimore over the three decades from 1950 to 1980 — flourished only after their respective states imposed property tax caps by referendum.

No sale. When the mic was turned off, I said “so I guess I didn’t convince you.”

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A scowl. And a revealing confession: “Oh, I could never believe any of that supply side crap.”

or roughly the next two years, a homeowner will send the city $250 a month as repayment for $5,702 worth of property tax breaks she didn¿t ask for and says she didn¿t quite realize she was getting.

Well then. I had not said anything about the “supply side” — I had been “typed.” Reagan-era tax policy had been aimed at encouraging more work and investment (supply) by trimming marginal tax rates and eliminating cost-ineffective regulations. On the left, such notions were ridiculed as “trickle-down” economics — aimed at delivering benefits chiefly to the rich. The idea that lower tax rates would expand the tax base was dismissed as fiction.

It’s certainly reasonable to debate the extent to which lower tax rates lead to growth in the base. And for a while, I thought that was the piece of my argument I needed to strengthen.

Over time, though, I realized that the more important part of my interviewer’s concluding remark was “I could never believe any of that.” No evidence I could marshal would ever be enough to surmount that barrier, at least to that person.

This, it seems to me, is a key obstacle to a genuine, organic renewal of Baltimore: There are just too many ideas that are off the table, beyond rational discussion.

Why is the Baltimore's property tax rate such a problem? It's about twice as high as the state's other counties; it favors developers at the expense of homeowners; it drives people, investment and businesses to surrounding counties; and it attracts nonprofits that don't pay taxes, forcing the tax burden on an increasingly smaller group of homeowners. To that last point, as of 2014 nearly a third of the city's property was not taxable —three times that of surrounding areas and the highest

In these rancorous times, minds on both sides of the ideological divide seem utterly closed. Start talking about tax barriers to growth, for example, and you are one of those evil (and probably racist) Republicans whose main goal in life is making rich white people richer. After all… there’s Donald Trump.

In local politics, unfortunately, closed-mindedness leads to an unhealthy sorting-out process. Hostility toward a particular point of view (both rhetorical and as realized in policy) tends to send those who hold it fleeing to more congenial environs. Their exit enhances the political and cultural strength of the dominant group. After a while, members of that group will know almost no one with views much different from their own.

Baltimore’s monoculture is described as “deep blue,” a quaint term for an ideological and political monopoly. We have not elected a Republican mayor since 1972 or a Republican council member since 1942.

On many margins, this is working out reasonably well. For example, though no one would be foolish enough to suggest that racism has been banished from the city, Baltimore has an admirable record with respect to black achievement in the political and legal spheres.

On the economic front, not so much. From Freddie Gray’s birth in 1990 until his tragic death in 2015 — during which he saw four progressive mayors, three of whom were black — the city lost 95,000 jobs.

So while Baltimoreans are proud of our progressive political culture, it’s important to note: If something is not working, it’s not really “progressive.” Not every plank in the progressive platform deserves unquestioned support; not every conservative principle deserves “never” to be believed.

The simple fact is that tax rates matter. A competitive rate is a necessary — though not sufficient — condition for a city’s economy to thrive and its citizens to flourish. If your mind is closed to that idea, you might consider asking yourself: What if I’m wrong?

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Stephen J.K. Walters is a professor of economics at Loyola University Maryland, and author of “Boom Towns: Restoring the Urban American Dream.” His email is swalters@loyola.edu.

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