A typo in a document approved by Baltimore’s powerful spending board almost led the city to reduce property taxes for homeowners to close to zero.
The error in the May vote was caught, and Wednesday the board is expected to approve a fix.
The problem arose with a credit designed to reduce how much people pay in taxes on their owner-occupied homes — to an average of 2.048% of assessed value, down from the city’s normal rate of 2.248%.
Getting that reduction requires a credit of 0.284% of the property’s value. But in May, the Board of Estimates approved a credit of 2.048% — the target average rate, and almost 10 times higher than the credit should be. The mistake came from a clerical error in a memo submitted by the city’s finance department for the board’s agenda. It was not connected to a ransomware attack on city computers in early May, a spokesman for the mayor said.
City Comptroller Joan Pratt, whose staff members compile the meeting agendas, said not every submission from city agencies is proofread.
Had bills gone out reflecting the erroneous credit, homeowners would have opened bills last week charging them next to nothing in property tax.
The credit has been in place since 2013, becoming more valuable each year as city leaders have sought to reduce taxes for homeowners by 0.2 percentage points by 2020. As the credit continues to grow, next year the average rate is projected to fall below 2% for the first time in half a century.
Baltimore’s property taxes are by far the highest in Maryland, with the state’s counties charging around 1%. When then-Mayor Catherine Pugh, a Democrat, announced in March that the city would reach its tax reduction goal, she said, “cutting property taxes in Baltimore in order to be more competitive is necessary.”
The credit is forecast to cost the city $36 million this year.