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Pugh administration testifies against bill allowing tax discount for lowest paid Baltimore workers

Baltimore, Md--10/18/17--Mayor Catherine Pugh gives the thumbs after speaking with reporters following ceremony where she signed the cover letter of the city's proposal to locate Amazon's second headquarters (HQ2) in Baltimore. Kim Hairston/Baltimore Sun.
Baltimore, Md--10/18/17--Mayor Catherine Pugh gives the thumbs after speaking with reporters following ceremony where she signed the cover letter of the city's proposal to locate Amazon's second headquarters (HQ2) in Baltimore. Kim Hairston/Baltimore Sun. (Kim Hairston / Baltimore Sun)

A lobbyist for Baltimore Mayor Catherine Pugh testified against a proposed state law that would have allowed the city to offer its lowest paid employees an annual $2,500 discount on their property taxes.

“While we support and applaud the intent of this bill, the annual and ongoing costs will unduly burden the City,” Karen Stokes, the mayor’s chief aide in Annapolis, wrote to the committee that heard the bill Tuesday.

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The measure is similar to one that the city is implementing for police officers, sheriff’s deputies and firefighters with Pugh’s support. It’s designed to encourage more public safety workers to move into the city, boosting the economy and building deeper ties between the employees and the communities they serve.

The annual cut translates into tens of thousands of dollars in extra borrowing power because of how it would lower monthly mortgage payments.

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Earlier this month, the City Council unanimously passed a resolution calling on the General Assembly to pass legislation to extend the program to the lowest paid 25 percent of city workers. A state law is required for the council to then pass a local bill putting the discount into effect.

Gov. Larry Hogan has proposed legislation that would cut fees and offer new financial assistance to some Maryland residents with septic systems.

But Pugh’s stance against the measure could severely hurt its chances in Annapolis. Sen. Bill Ferguson, the lead sponsor of the bill in the upper chamber, said Pugh’s position would carry significant weight.

Ferguson, a Baltimore Democrat, said he supported the idea because some of the lowest paid city workers are the “heart and soul” of the local bureaucracy.

“They are the front office staff that are the entry way to city government and encouraging them to live and buy homes in the city will only help to promote their individual investment in the long term success [of the city],” he said.

About a thousand city employees who make $38,000 a year or less and own homes would immediately be eligible for the credit.

Stokes said the city estimated the discount would cost $2.5 million a year, a figure state legislative analysts agreed on. But Stokes wrote that the state analysis didn’t take into account what would happen if the law encouraged more low income city employees to buy homes. In that case, the cost could rise to at least $4.7 million, Stokes wrote.

Councilman Ryan Dorsey, who testified in favor of the bill in Annapolis, said the city’s position on public safety workers and low income workers appear to be at odds.

“With the public safety credit, their hope is that it will grow, because they say they hope it will motivate even more to move into the city,” he said. “And they’ve never raised fiscal concerns before.”

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