Property Tax Assessment Cap Debated

October 06, 1991|By Carol L. Bowers | Carol L. Bowers,Staff writer

County administrators and the County Council are debating whether toraise the property tax assessment cap from 6 percent to 10 percent as a way to offset $4 million in state aid cutbacks.

If the property tax assessment cap is raised, it would generate $731,000 more in income for the county than last year, said John Scotten, deputy treasurer.

Council members have mixed opinions on the proposal.

PresidentJeffrey D. Wilson and Councilwoman Theresa M. Pierno, D-District C, said last week they support raising the property tax assessment to 10percent.

"I think it's necessary," said Pierno, who said she wasn't breaking any campaign promises by endorsing the increase.

Councilman Barry T. Glassman, R-District D, doesn't agree that raising thecap is necessary.

Glassman said he considers it a "knee-jerk reaction" to raise the assessment cap to 10 percent without waiting to see what action the General Assembly takes.

"I have prepared draft legislation keeping the property tax assessment cap at 6 percent," said Glassman. "I'm still debating whether to introduce it; the state budget cuts have shed some new light on the problem."

The county lawthat set the cap was created last year as a result of a state law requiring all counties to cap increases in property tax assessments at 10 percent or less. The law must be enacted anew locally each year.

"I was the only member of the council to vote against the 6 percentcap," said Wilson. "It's a tax break which helps owners of modest properties less than it helps owners of luxurious properties."

Wilson said he would consider raising the cap provided the increases in the cap, fees and penalties are tied to a commitment to give employees midyear step pay increases -- automatic raises called for in the payroll plan.

The county is expected to end the year with $9.8 millionunspent. That money has been set aside as a financial cushion to preserve the county's bond rating.

County Executive Eileen M. Rehrmann has resisted giving employees midyear pay raises, saying there may not be enough money next year to fulfill the obligation again.

Twoweeks ago, when hints of major state budget cuts surfaced, Rehrmann set aside $4 million of the leftover $9.8 million to be used to absorb the cuts. Rehrmann says that instead of touching the remaining $5.8million, the county must find new sources of income.

Property taxassessments, performed every three years by county inspectors, determine how much an owner-occupied house is worth based on market value.

John Scotten, deputy county treasurer, said that by raising the property tax assessment cap to 10 percent, Harford would gain $731,000in fiscal 1993, which ends June 30, 1993.

With the current property tax rate of $2.73 per $100 of assessed value, and a 10 percent assessment cap, Scotten estimated county property tax revenue in subsequent years as follows:

* Fiscal 1994 -- $1 million

* Fiscal 1995-- $1.3 million

* Fiscal 1996 -- $1.7 million

Pierno said raising the property tax assessment cap to 10 percent is necessary because "with the fiscal situation, we can't afford to cut any deeper into services."

"We're not considering raising the property tax rate atthis time, but we don't have a lot of other options," said Pierno.

Glassman said he realizes the county does "need to raise revenues. But I wouldn't want the state to levy a new line of taxes and have the county follow the same suit.

"When revenues increase once the economy recovers, very rarely do citizens see any tax relief."


Assuming an 11 percent assessment growth rate, owners of an average-priced county home with a sale price of $120,000 could expect to pay the following in property taxes:

.. .. ..No cap.. .. 10 percent cap.. .. .. .. 6 percentcap


1994.. $1,455.. .. .. $1,441.. .. .. .. .. .. .. $1,389


1996.. .$1,792.. .. .. $1,744.. .. .. .. .. .. .. $1,561

Based on a county tax rate of $2.73 per $100 of assessed value of the home.

Source: Harford County Treasurer's Office

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