Saying she's convinced Baltimore's high property taxes are driving residents and business away, Del. Maggie McIntosh has introduced legislation aimed at helping retain current homeowners while launching studies of ways to reduce the rate.
With support from nearly all the city's House delegation, McIntosh, a six-term Democrat representing Northeast Baltimore, has introduced five bills targeting potential inequities in the assessment of properties in the city, where tax rates are more than double those of neighboring counties.
One measure would let longtime Baltimore homeowners transfer their Homestead Tax Credit if they want to buy another place in the city. Another would have the state hire six more assessors to take a closer look at assessments in the city, where McIntosh contends Maryland's computerized "mass appraisal" system can't catch inadvertent or deliberate misclassifications of properties for tax purposes.
Yet another bill would require all churches, universities and other charitable or nonprofit organizations to certify that all the property they own is still being used for tax-exempt purposes. One reason tax rates are high in the city, she noted, is that roughly one-third of all the city's real estate is exempt from taxation.
The other two bills would launch studies of ways to possibly reduce the city's tax rate while also looking to see if residential, rental and commercial properties are assessed equitably. McIntosh said she hoped the studies would show how the city might lower tax rates without sacrificing needed revenue.
The city's real estate tax rate — $2.248 per $100 of assessed value of the property — is set by Baltimore's City Council, not the state. But the state handles assessments and sets terms for tax breaks such as the Homestead Tax Credit, which prevents a homeowner's property taxes from rising more than 4 percent a year.
McIntosh said she's heard from enough constituents and others that the city's tax rates are a factor in pushing residents to leave.
"Schools are now not the only issue," she said. "Crime is not the only issue. It is the sticker shock on the real estate taxes."
Kevin Harris, spokesman for Mayor Stephanie Rawlings-Blake, said she supports the bills calling for an increase in state property assessors and requiring owners of tax-exempt properties to recertify their eligibility. He said city officials are still studying the idea of letting homeowners transfer the tax credits to another home — something that could cost the cash-strapped city revenue.
There are 73,609 homeowners getting homestead tax credits in Baltimore now, according to the state Department of Assessments and Taxation. The credits cost the city $56.4 million in taxes.
Maryland Policy & Politics
Since carrying over tax credits to a new home is not allowed now, there is no way to predict how many people would take advantage of it or what it would cost the city in taxes forgone. Robert Young, director of the state assessments department, said in the current tax year, 2,400 city properties getting a homestead credit were sold. Those properties collectively enjoyed a tax break of $2.75 million, he said — money the city might lose if all those credits were transferred to new homes in the city.
McIntosh, however, contended that any revenue lost to the city from letting credits transfer would be made up through an increase in home sales, as more residents opt to buy their next home in the city.
Baltimore homeowner Tracy Gosson welcomed the proposal to permit homestead credit transfers. Gosson, who once ran Live Baltimore, a nonprofit organization that promotes living in the city, said the credit was a great boon for her personally, reducing taxes considerably on her Butchers Hill home. But she added that the prospect of losing the credit kept her for years, until recently, from buying a bigger new place in the city.
"Giving this type of carry-over credit is a bit of a 'we're in it with you' from the city to the people that invested in the city when it really needed it," she said, "and committed to staying in the game."
Joseph T. "Jody" Landers III, a real estate agent, former city councilman and 2011 mayoral candidate who ran on a tax-reduction platform, said McIntosh's bills are "nibbling around the edges" of tax reform, and they don't do much to address the big disparity between city and suburban taxes.
"But sometimes that's all you can get, and that's good," he said. "I never let the perfect get in the way of having something positive get done."