A Baltimore County tax reform committee has recycled some old ideas, but added a new twist, in trying to address the problem of high and allegedly unfair property taxes.
The committee's goal is to reduce or eliminate property taxes in favor of higher income taxes on the theory that income taxes, at least, are based on one's ability to pay.
The committee's new wrinkle is a proposal that would tie a 10 percent increase in the county's share of the state income tax to a floating limit on property taxes. That, in theory, would limit the county from collecting more revenue in an income tax-based system than it does under the current set-up.
That idea, along with a few others for raising corporate taxes and several use fees, will be presented to Baltimore County Executive Roger B. Hayden, who appointed the committee, and the County Council.
The committee, which met last week, gave short shrift to the idea of simply exchanging the property tax for a local income tax, as proposed by District Court Judge John C. Coolahan, a former state senator. State legislators had, in fact, floated that idea several times during the 1970s and it once even passed the House of Delegates.
But committee Chairman Larry Epstein, an unsuccessful Republican candidate for state comptroller last year, said it could destroy the county's bond rating and would be expensive to collect. The bond rating could suffer because the county could not anticipate revenues based on income with as much certainly as it can based on property values, he said.
Another idea that got a better reception from the committee would involve getting the General Assembly to raise the county's share of the piggyback income tax from 50 to 60 percent and add $11 million more in higher corporate taxes, in exchange for dropping the property tax rate by about 72 cents.
The imposition of several new or expanded specialty taxes could raise enough to cut perhaps another three or four cents from the tax rate, Epstein said. These could include a $10 fee for collecting bulk trash items, a $2 car-rental tax, a $10-per-space tax on commercial parking spaces on lots with more than 100 spaces, and broadened real estate transfer taxes, mostly on corporations, which could raise up to $3 million more a year.
To keep the changes from raising taxes overall, the proposal would cap annual property tax revenues based on a formula tied to property assessments and the consumer price index.