Fiscal Madness

November 02, 1992

One of the questions Montgomery and Prince George's County voters face tomorrow is a cap on property taxes. It's not a cap, it's a straight-jacket. Perhaps choke-hold is more descriptive. Approval of the ballot question in either county -- or in Anne Arundel County, where a tax cap also is being proposed -- would be fiscal madness.

The proposals, Question A in Montgomery and Question D in Prince George's, would limit annual increases in property tax revenues to the rate of inflation, with a 5 percent ceiling in Prince George's. Sounds reasonable to voters who want to slow government spending. But neither proposal allows revenue growth for new construction.

That means a new housing development contributes nothing additional to county revenues while increasing the demand for public services like school rooms, police patrols and fire protection. By forcing government spending to level off in this fashion, the tax caps would unavoidably reduce public services to residents by spreading the same amount of money over a growing population.

Revival of this idea is particularly astonishing in Prince George's, which has been through a similar tax straight-jacket and experienced its negative impact. The TRIM initiative adopted in 1978 increased average class size, slowed police response time and wreaked havoc on public services. Ironically, it shifted more of the property tax burden onto homeowners. Because of the slower growth in commercial property value, the share of property taxes paid by homeowners rose from 60 percent to 78 percent by 1984, when the voters modified it.

Voters seeking a current example need only look across the bay to prosperous, conservative Talbot County. There a similar tax cap has severely impaired public services despite the county's 60 percent piggyback income tax. The county has been compelled to reduce its support of volunteer fire companies, eliminate contributions to hospitals and reduce sheriff's patrols at night. It eliminated all road paving, capital improvements and building maintenance last year.

Given voter frustration over taxes and government spending, some limit on the increase imposed on property tax payments may be politically unavoidable. In Prince George's, County Executive Parris Glendening and the county council have now limited increases in homeowners' property tax payments to the inflation rate, with a 5 percent ceiling. That is a lesser evil than strangling vital services. Voters in Montgomery and Prince George's will hurt themselves, not the politicians, if they fall for the fiscal flim-flam on their ballots.

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