Trade Council opposes proposed 4.5% tax cap

October 22, 1992|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

A ballot question that would limit the growth of property taxes would paralyze Anne Arundel County during an economic crisis, possibly forcing officials to severely cut basic services, say county business leaders opposing the measure.

But the leader of a county taxpayer group says the Anne Arundel Trade Council's position on the tax cap is just bad business.

The Trade Council's board of directors -- nearly 30 senior executives of county-headquartered companies -- voted unanimously to oppose a county charter amendment that would slow annual growth in property tax income to 4.5 percent or the rate of inflation, whichever is less.

"This approach is very inflexible," said Bertrand A. Mason, Trade Council president and president of Alliance Property Corp. in Arnold. "You set a rigid cap, and you're stuck with it."

The board is urging Trade Council members to vote Nov. 3 against a measure that would tie government officials' hands during a prolonged economic slowdown, Mr. Mason said. The board also believes the cap focuses too narrowly on real estate taxes.

Robert Schaeffer, president of the Anne Arundel Taxpayers Association, countered that lower taxes would help stimulate business during an economic slowdown.

"For business people, they don't seem to understand that's good for business," he said. "You don't raise taxes in a recession; you lower them."

Mr. Schaeffer's group led a fight two years ago to cap property-tax income, but a similar ballot question failed, garnering barely 45 percent of the vote. The Maryland State Teachers Association and a regional group, Fairness for All County Taxpayers, lobbied heavily against the initiative.

Mr. Schaeffer argues that government should raise a greater share of money through consumption, rather than property, taxes. Revenue from property taxes funds 43 percent of the area's budget, up from 35 percent two years ago, he said.

"There has to be a stopping point," he said. "You can't continue to raise taxes indefinitely, because people will run out of money. We've reached that point."

Mr. Bertrand said, "Generally, our organization does not favor increasing taxes. But we did support the increase in the gasoline tax with the promise it would be used for roads and mass transit. And in this case, [the cap] does not make sense."

He added that the group has supported County Executive Robert R. Neall's efforts to make up for state cuts by trimming county government expenses.

"We're not particularly uncomfortable with leaving him some discretion, given his record," Mr. Mason said.

Business people fear a tax cap would leave the county with shortfalls and delay improvements to water, sewer and transportation systems and to the public schools. The budget office projects the county could lose $25.4 million in property tax revenue in the 1993 fiscal year if the tax cap passes.

Mr. Schaeffer took issue with that projection, saying that it doesn't take into account the growth in tax revenue that would continue with the cap.

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