Arundel tax rebels may sue Assessment caps statewide could be in jeopardy ANNE ARUNDEL COUNTY

December 23, 1992|By John Rivera | John Rivera,Staff Writer

Tax rebels in Anne Arundel County are threatening to challenge in court the county's limit on property assessment increases, a move that could threaten tax credits for more than a half million homeowners statewide.

On Monday, the County Council adopted a 4 percent cap on annual assessment increases.

But Robert C. Schaeffer, leader of the county's anti-tax group, complained that the assessment cap benefits only affluent homeowners whose properties increase in value more rapidly than others. Their assessments would be held artificially low, while the assessments of more moderately priced homes would hardly be affected.

Should Anne Arundel's assessment cap be struck down, TC statewide cap on assessment increases, as well as local limits in several counties, could be in jeopardy.

The General Assembly adopted a 10 percent cap on assessment increases in 1990. Since then, Anne Arundel County, Baltimore City and Baltimore County have limited assessment increases to 4 percent. The limit is 5 percent in Charles, Howard, Kent and Prince George's counties. Talbot County's limit is 0 percent. The other 16 counties have assessment limits set at 10 percent.

Ronald W. Wineholt, deputy director of the state department of assessments and taxation, said that nearly 590,000 homeowners statewide would receive $62 million in tax credits next year as a result of the assessment limits.

Anne Arundel County Executive Robert R. Neall said he introduced the local assessment cap to give homeowners the lower tax bills they expected when they approved a limit on property tax revenues at the polls in November.

That initiative limited the increase in the county's property tax revenue to 4.5 percent a year or the rate of inflation, whichever is lower.

County lawyers said the revenue cap applies to commercial property as well as owner-occupied homes, diluting the savings to homeowners and compounding the revenue loss to the county. Mr. Neall said the assessment cap would shift much of the savings from businesses back to homeowners.

Budget Officer Steven Welkos told the Council that capping assessments at 4 percent was the only way to keep the bills of county taxpayers from increasing more than the current 3 percent rate of inflation.

But under that cap, the property tax rate would go down only 5 cents next year to keep total revenues under the cap. That figure would have been 9 cents under the revenue cap that Mr. Schaeffer authored.

"One thing should be abundantly clear," Mr. Schaeffer warned, "if the tax rate is not reduced 9 cents -- and the assessment cap is dropped to 4 percent to compensate for that change -- then any taxpayer whose property does not increase in assessed value by 4 percent or greater will receive only a 5-cent tax reduction instead of a 9-cent reduction and will receive no benefit from a decrease in the assessment cap."

Mr. Welkos admitted that about 36,000 homeowners whose assessments would increase less than 4 percent would be better off if the assessment cap remained at 10 percent and they received the 9-cent drop in the tax rate.

Even the county auditor, the council's fiscal adviser, opposed the assessment cap.

Raymond Dearchs, assistant county auditor, said his office objected to the lower assessment cap because it interferes with the assessment process, artificially holding down assessments on expensive properties.

And Mr. Schaeffer brandished an opinion from County Attorney Judson P. Garrett that admitted that state lawyers have consistently advised that percentage limitations on residential assessment increases violate state constitutional requirements that mandate uniformity in assessments and taxation for all property.

"There have been to my recollection several opinions going . . . pointing out that the uniformity clause . . . may be violated [by assessment caps], and we just keep bringing that to the attention of the General Assembly," Mr. Curran said last night.

Capping assessments is "a valuable public purpose," he added, "but, as I say, it does possibly have a problem with uniformity."

Louise Hayman, a spokeswoman for Mr. Neall, said she would not comment until Mr. Schaeffer's group files its suit.

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