Rates, not assessments

December 10, 1990

It's predictable: As new tax assessments go out, protests come in. But much of the shouting simply compounds the confusion. Unfortunately, much of that confusion is clouding the debate over the Linowes report on tax restructuring.

Assessments are designed to be an objective measurement of the market value of property. Rising or falling assessments reflect rising or falling real estate prices. In Maryland, these values are set by a state agency -- a method which keeps the process relatively free of political pressures that would inevitably creep in if the assessment role were a function of local jurisdictions.

Tax assessments are often confused with the tax rates. Protesting taxpayers are unhappy with the tax rate set by their local jurisdiction. A letter to the Forum last week reflected this same confusion, when the writer charged that the Linowes Commission proposals would raise property taxes because they recommend basing taxes on 100 percent of the assessed value, rather than the current practice of using only about 40 percent of the full value.

That's simply a misreading of the recommendation. The Linowes proposals would reduce property taxes in two ways. First, by going to a tax based on 100 percent of assessed value, local jurisdictions would then drop the tax rate in return (or risk a full-blown tax revolution). The advantage of this method is its relative simplicity -- it's easier for taxpayers to see what they will pay, and thus easier to hold their elected officials accountable for tax rates.

But the charge that the Linowes proposal would raise property taxes misses another crucial aspect of the report -- the fact that the proposals would include infusions of funds to local jurisdictions to help them wean themselves from their heavy reliance on property taxes. These new funds from other tax sources will account for substantial drops in property tax rates around the state.

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