It seems a virtual certainty that the county's property tax assessment cap will be raised to 10 percent to boost revenue and offset statebudget cuts.
If the cap is raised, Harford could collect at least$731,000 more in property taxes next year, said county Treasurer James M. Jewell. This year, the county collected $61.5 million in real property taxes, which represents 40 percent of the county's income, Jewell said.
Three council members introduced a measure Tuesday raising the tax assessment cap to 10 percent from its current 6 percent, and a fourth council member says she favors the bill, making a majority vote onthe seven-member body likely. The move to raise the cap also is backed by County Executive Eileen M. Rehrmann.
However, three other council members said they want the tax assessment cap to remain the same. They introduced a bill Tuesday to do that.
The swing vote belongs to Councilwoman Susan B. Heselton, R-District A, the only council member whose name does not appear on either bill related to the tax assessment cap.
"Yes, I favor raising the tax assessment cap," Heselton said after the council meeting Tuesday. The previous council, she said, "cut off their noses to spite their faces when they set the cap at 6 percent last year. It gave us no leeway, and I sat in the audience and told them so at the time."
A state law passed last year requires counties to set tax assessment caps at 10 percent or less; the cap must be re-established each year. The cap is the highest percentage an assessment on a property can increase in one year.
That means that if a home valued at $100,000 was determined by the county to have improved in value by the current cap of 6 percent, its next tax assessment bill would based on the home being worth $106,000.
Assessments, performed every three years, determine the market or full cash value of a home or property. Property taxes are calculated basedon 40 percent of the full or market value of a home or property, a rate set by state law.
A home valued at $100,000 home would be assessed at $40,000. The taxes owed would be calculated by multiplying the assessable base ($40,000) times the tax rate, which in Harford is $2.73 per $100 of assessed value.
So the owner of a $100,000 home would owe $1,092 in property taxes.
Under a 10 percent tax assessment cap, the tax bill for that same house could be as high as $1,201 if it were determined that home's value increased by 10 percent a year. Under a 6 percent tax assessment cap, a tax bill on a $100,000 house could be only as high as $1,158 -- $43 less.
The bill raising the tax assessment cap was drafted by council President Jeffrey D. Wilson and members Theresa M. Pierno, D-District C, and Philip J. Barker,D-District F.
Wilson and Pierno said they favor raising the cap because they believe the 6 percent tax assessment cap gives an unfair advantage to owners of high-priced properties, because those properties appreciate in value by more than 6 percent per year.
Wilson hassaid he wants raising the tax assessment cap and other revenue generating moves tied to giving county employees raises.
Faced with more than $6 million in state cuts, Rehrmann has said there is no money to give employees raises this year.
Barker disagrees with Wilson on how the new revenue should be spent.
"With all the budget cuts, we need to figure out where other sources of income are," said Barker. "But I don't believe there should be any strings attached to the use of that money."
On the opposite side of the issue are council members Barry T. Glassman, R-District D, Robert S. Wagner, R-District E, and Joanne S. Parrott, R-District B.
Wagner said, "The little bit it does raise is nothing more than a Band-Aid. It doesn't generate enough money to impress me. Pretty soon you'll have 15 different taxes to address the problem, and I don't want to do it that way."
Parrott said that raising the tax assessment cap would be wrong because the recession is hitting everyone hard.
Glassman also wants to maintain the 6 percent tax assessment cap because of the recession. "During a recession the worst thing you can do is raise taxes," he said.
Glassman said that he would favor raising fees charged to users ofvarious county services, such as permit and license fees.
"There's a general feeling after the state budget cuts that we have to raisemoney any way we can, but I'm not ready to throw in my hat yet."