Legislators tackle property tax issue

February 12, 2006|By TAMELA BAKER


If there's nothing more certain than death and taxes, Marylanders are certain they're being taxed to death.

Property owners from all over the state have been demanding relief from rocketing property assessments, and everyone from the governor down is scrambling to respond. As of Thursday, no less than 73 bills dealing with property taxes had been filed in the Maryland General Assembly.

"The fact that there's so many means there's a problem," said Del. Terry Gilleland, R-Anne Arundel, the lead sponsor of three of them. "People are being taxed out of their houses."

Several of the bills are local measures that pertain only to certain counties. One of the latest to be filed is the Washington County Delegation's bill to lower the county's property assessment cap from 10 percent to 5 percent per year.


The delegation took some of the county commissioners by surprise last week by sponsoring the bill. The legislators had been inundated with complaints from county residents about double-digit assessment hikes - and the corresponding tax bills.

"We have lots of constituents feeling the effects of this," said Del. LeRoy E. Myers, R-Washington/Allegany.

And Washington County is not alone.

"Nothing gets citizens' backs up like property taxes," Demaris "Dee" Hodges, president of the Maryland Taxpayers Association, told the House Ways and Means Committee last week.

Annapolis resident Kevin Miller told the committee the assessment on his home had increased 50 percent since the last assessment cycle, while his salary only had increased 12 percent.

"The tax is beyond my control," Miller said. And while he acknowledged that government couldn't control its value, "you can control how much you tax my house," he said.

Gov. Robert Ehrlich proposed a 15 percent property tax cut in his fiscal 2007 budget, eliminating part of the tax increase his administration imposed in 2003.

But lawmakers have gotten a little more creative in their proposals than a simple across-the-board cut in the state's property tax rate.

Taxing task

The House Ways and Means Committee heard some of the first proposals last week. Two in particular - sponsored respectively by the House Democratic leadership and by the Ehrlich administration - would expand the state's Homeowners Property Tax Credit Program, which targets lower-income property owners with credits based on income and property assessment. One of the sponsors, Del. Brian McHale, D-Baltimore, said the intent is to extend the program "for people who want to continue living in their neighborhoods, but can't afford the taxes on their new assessments."

The bulk of the increases in those assessments comes not from homes or other improvements, but from the property itself, said Del. Jean Cryor, R-Montgomery.

"Have you thought about separating that out?" she asked.

"Nothing is etched in stone," McHale said. Assessors "seemed to be using arbitrary values in Baltimore, without any real justification," he added.

Several bills, both local and statewide, would provide credits for senior citizens, veterans and others. But that's not enough, argues Del. Herb McMillan, R-Anne Arundel.

"I don't feel like the government should be entitled to more of a family's money just because the paper value of their house goes up," McMillan said. "This is not just about retirees." Middle-class families feel the pinch, too, he said.

"Not everybody's getting raises," McMillan said. "There are a lot of people barely managing to keep up."

McMillan has sponsored a bill to do statewide what the Washington County bill would do locally: lower the cap on assessments.

"Assessment rates are insidious," he said. Few local governments, he added, have reduced tax rates to compensate for higher assessments - exactly the point made by Del. Christopher B. Shank, R-Washington, when he tied a study of assessments and tax rates to the delegation's support for revising the county's excise tax last year.

A different approach

While Gilleland signed onto McMillan's bill as a co-sponsor, he has taken a different approach with his own statewide relief measure. His bill would change the assessment cycle from three years to four, lowering the incremental increases charged to taxpayers from 33 percent to 25 percent.

He doesn't expect the bill to pass this year; if past is prologue, the cost to state and local governments would be deemed prohibitive. He filed a similar bill last year that would have changed the cycle to five years - at a loss of $52 million in new tax revenues to the state and a combined loss of $398 million in new money to local governments.

But with governments posting surpluses this year, Gilleland said, "that's money that people would doing something else with."

Practicality could be on Gilleland's side - testifying before the committee on an unrelated matter last week, Department of Assessments and Taxation analyst Laura Foussekis told the lawmakers the department had asked for - and been denied - 70 more assessors last year to keep up with assessments for the three-year cycle.

"Then we're losing a lot of revenue," concluded Del. Bennett Bozman, D-Worcester/Wicomico.

"I can't disagree with that," Foussekis said.

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