Council to vote on Neall's assessment cap plan

December 21, 1992|By John Rivera | John Rivera,Staff Writer

The Anne Arundel County Council is scheduled to vote tonight on County Executive Robert R. Neall's plan to cap at 4 percent the property assessment increase on which homeowners can be taxed, a measure he says is necessary for homeowners to realize the sort of savings they expected when voting for a property tax cap last month.

But its passage, as well as its effect, is far from certain.

The bill would only affect assessments during the coming year, and would have to be re-adopted annually. But confusion over its effect has persuaded Council Chairman David G. Boschert to say he would most likely oppose the bill, preferring to stick with the relief offered by the recently approved tax cap.

The tax cap limits the increase in property tax revenue the county can collect to the rate of inflation or 4.5 percent, whichever is less.

According to Mr. Neall, many homeowners thought they were voting to limit their individual tax bills, instead of the total revenue collected by the county. And many supporters, including the man who drew up the amendment, thought the cap would apply only to homeowners, not to commercial property. An opinion released last week by the county's Office of Law confirmed that the tax cap applies to both homes and commercial property.

Under Mr. Neall's cap, the property tax rate would go down 5 cents, instead of the 9-cent drop that would result without it. But the executive's measure would benefit those whose houses appreciate dramatically in value -- since the money saved through capping assessments would outweigh the savings resulting from a lower tax rate.

Mr. Neall proposed the assessment cap, which goes a step further than a state program that holds assessment increases to 10 percent, as a way of providing targeted tax relief only to homeowners. Under the bill, commercial property owners would contribute proportionately more to the overall revenue pool.

Several Council members expressed concerns that might threaten Mr. Neall's proposal. They said county auditor Joseph Novotny has indicated he will recommend against the bill because it tends to help high-income taxpayers, whose assessments rise rapidly, rather than the owners of more modest real estate, whose assessments most likely would stay flat or would decrease.

"I'm not at all in favor of it if it's not equitable," said Councilwoman Maureen Lamb.

Mr. Novotny said his preliminary findings indicated that its fiscal effect was minimal. "This is basically shifting some of the burden from homeowners to businesses," he said. "As we look into it, the only shifting that takes place is less than $2 million," about 1 percent of the total property tax revenue.

"It really doesn't bring any great savings" to taxpayers, he said.

Several Council members also said they were concerned about issues raised by Robert C. Schaeffer, president of the Anne Arundel Taxpayers Association and author of the tax cap. Mr. Schaeffer, in a letter to the Council, said members should consider what the assessment cap's effect might be in coming years.

Mr. Schaeffer said he did not know, but absent a careful analysis, neither did the council.

Council members also complained they were being rushed to adopt the legislation. The bill was introduced Dec. 7, and administration officials told the Council last week that by state law, the assessment cap must be set by Jan. 1.

Because tonight is the Council's last meeting of the year, they would have to vote on it now for it to legally take effect on July 1.

"I really do not, in good conscience, want to rush this thing through," Mr. Boschert said. "I don't appreciate the deadline."

Mr. Boschert said he was inclined to stick with the the tax cap, drop the property tax rate by 9 cents, leave the assessment cap at its current 10 percent and see how it worked for a year. The fact that commercial property owners would benefit did not particularly bother him.

"Due to the bad climate that businesses are in, this may not be a bad time to give them an economic break," he said.

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