Restoring Faith in City Living

November 17, 1990

When voters ousted the incumbent Anne Arundel and Baltimore County executives Nov. 6, they sent shock waves not only through Towson and Annapolis but also Baltimore's City Hall. As a result, Mayor Kurt L. Schmoke has abandoned thoughts of a 10 percent cap on property tax assessments and now advocates a 4 percent ceiling. "The amount of loss is not going to be that great, but the positive signal it is sending to middle-class homeowners is significant," said the mayor, who is up for re-election next year.

This signal comes none too soon. After decades of exodus, the city's middle-class is again visibly apprehensive, counting "For Sale" signs in their neighborhoods.

The city's high property tax, exorbitant auto insurance rates and inferior schools are only some of the reasons families move to surrounding counties. Their departure is bleeding the city dry. Not only is its property tax base shrinking but the city is losing much-needed revenues collected through the state's piggyback income tax. If Baltimore is to remain a viable metropolis, it must have a balanced population. It simply cannot be a city for the rich and the very poor. Yet this is what is happening as middle-class whites and blacks flee.

A 4 percent assessment cap may be a way to change this middle-class pathology of flight, but now that he has raised expectations we hope Mayor Schmoke knows what he is getting into.

The proposed property tax cap promises relief for city homeowners, but it may be interpreted by some legislators in Annapolis as a signal that the financially strapped city is not making a maximum effort to tax its own citizens. This perception may be a problem, particularly if the mayor also proposes a 10-cent drop in the property tax rate. "Why give more state money to Baltimore?" they are likely to ask.

Mr. Schmoke should make sure that legislators understand that an impossibly high property tax rate is one of the causes of Baltimore's worsening fiscal problem. The city -- and the state -- have to take steps to restore the faith of the taxpaying middle-class in the city's future.

Mr. Schmoke's dilemma, however, is how to cut the current tax rate and cover the $2.5 million shortfall caused by a 4 percent assessment cap.

The mayor says he expects great things from proposals of the Linowes commission on state taxation that would help the city. This strikes us as wishful thinking. The chances of the Linowes reforms being enacted quickly are not good. Thus, Mr. Schmoke must be ready to finance all his proposals through belt-tightening at home. That won't be easy.

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