No Tax Relief in the City

June 20, 1992

When this year's budget preparation season began, members of the Baltimore City Council talked about their desire to cut taxes. The city's property tax rate, after all, is twice that of any other surrounding county.

But when the council and the Board of Estimates took final budget action this week, they saw no choice but to continue the current rate. "We have to stick with that $5.90 rate because we just don't know what will come from Annapolis in the fall," Council President Mary Pat Clarke lamented.

Property owners were not the only Baltimoreans who were asketo make do. For a second straight year, 26,000 municipal dTC employees were told there was no money in the kitty for pay raises. No one was happy about the situation, but at least they retained their jobs.

As federal assistance to the nation's cities has decreasedBaltimore has become increasingly dependent on state aid. While the city did as well as could be expected during the recent General Assembly session, the elusive economic recovery -- plus overly rosy budget projections -- now threatens to undo the state's revenue forecasts. If that happens, the state may have to take emergency measures that will impact all local subdivisions.

This is not a happy prospect to consider, particularly since thproperty tax rate once set in the city or the counties cannot be altered for another year. Similarly, no change can be made in the amount of local piggyback income tax, which Baltimore City decided to keep at 50 percent of the state levy.

In contrast, Baltimore County opted to increase its piggyback tax by 10 percent, to 55 percent of the state income tax. The city, however, felt that such a burden, in addition to the extraordinarily high property tax rate, could be counter-productive and would only encourage more middle class families to move to the suburbs.

Yet the city has to prepare itself for possible emergencies. Moraggressive economic development is needed, but it will not produce results overnight. For that reason, we urge Jacqueline McLean, the new city comptroller, to make a comprehensive survey of the city's collection practices. We suspect that Baltimore is no different from many other major cities and that a large number of individuals and companies simply do not pay the many fees they should, under existing ordinances. It is the responsibility of the city comptroller's office to see that the city treasury gets its share.

Similarly, the municipal government ought to study ways tencourage payments in lieu of taxes from the numerous tax-exempt organizations that own property in Baltimore and enjoy city services without paying a penny for them. Taxpayers alone can no longer carry that burden.

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