The taxman cometh, but with mercy for a change Assessments rising by the least in years

December 30, 1992|By Larry Carson | Larry Carson,Staff Writer Staff writers John Rivera, Bruce Reid, James M. Coram, Amy Miller and William F. Zorzi Jr. contributed to this report.

Two years of recession brought good news for many Maryland homeowners this week -- new property tax assessments showing the lowest average increase in several decades.

Of assessment notices newly mailed to 615,000 property owners, nearly 40 percent showed either no change or a decrease to below 1989 values.

The good news for homeowners is bad news for local government officials -- the low assessment increases mean less growth in property tax revenue for the next several years. That will boost pressure on local elected officials to raise property tax rates, or to find other sources of revenue.

William A. Saltzman, assistant to the director of the State Department of Assessments and Taxation, said this year's average increase -- 0.6 percent -- is the lowest in 20 years. He said the recession is the reason.

Last year, the average statewide assessment increase was 7 percent. In 1984, property values rose an average of 17.3 percent.

In Maryland, one-third of the properties in each local jurisdiction are reassessed each year.

Carroll County's average assessment increase of 3 percent was the largest in the Baltimore metropolitan area this year.

"Characteristically, the reassessment has been 10 percent," said county Budget Director Steven D. Powell. "We'll expect a lower increase in real estate tax revenues for [fiscal year] 1994."

Howard County saw a 2 percent increase, Anne Arundel a 1.8 percent increase and Harford a 1.7 percent increase.

Baltimore had an average assessment increase of .7 percent, while Baltimore County properties increased an average of 0.5 percent.

Montgomery County, the wealthiest county in the state, saw its average assessment drop 2.6 percent this year from the 1989 assessment. That was the biggest drop in the state. Montgomery County also will have 39,000 fewer properties qualifying under its 10 percent cap. Talbot County had an average assessment decrease of 1.6 percent.

In Baltimore County, 57 percent of the properties reassessed showed either no increase or a decrease in value.

"We finally got it through their thick skulls that they over-assessed us. It was unfair," said David E. Boyd, Baltimore County's most vocal tax opponent.

In Baltimore County, the notices were being received by many of the taxpayers who led a citizen revolt against higher property taxes and sharply higher assessments. Their efforts helped defeat an incumbent county executive and five County Council members in the 1990 elections.

"We're finally reaping a little of the spoils of our own victory," said Mr. Boyd, a northern Baltimore County resident who founded Property Taxpayers United.

Interestingly, the average increases are lower in most counties than the local assessment cap that politicians had imposed.

Baltimore County's 0.5 percent average assessment increase is far below the county's 4 percent cap. This means county coffers will not be growing as fast as expected. County budget officials will use the new assessment information to help plan their budgets for the fiscal year that begins July 1.

Fred Homan, the county's budget director, said he was expecting smaller assessment increases this year, but not as small as what emerged.

"We were expecting slower growth, but this is slower than we expected," he said.

The county's assessable tax base also has slowed and will grow only 3.7 percent. That compares with growth rates as high as 12 percent during the last 20 years.

Mr. Saltzman said Baltimore's total assessable base will increase only 1.2 percent next year. The assessable base is the value of all real property on which property taxes are based.

Since fewer Baltimore County taxpayers will be benefiting from the assessment cap, taxpayers there will reap fewer tax credits next July when local tax bills are mailed. In Baltimore County, 20,000 fewer properties will qualify for tax credits.

In Charles County, a fast-growing bedroom suburb of Washington, assessments are growing faster than anywhere else in Maryland this year. There, 13,000 more properties will qualify for tax credits under the 5 percent cap. Charles County assessments increased an average of 7 percent.

Throughout the metropolitan area, local officials weren't too surprised by news that assessments were lower than in previous years.

* BALTIMORE -- The 1.2 percent increase in Baltimore's assessable base did not come as a surprise to city budget officials, who now are in the process of preparing the budget for fiscal year 1994, which begins July 1, based on these figures.

"We did not expect that the base was going to increase much at all," said Budget Director Edward J. Gallagher, Baltimore's budget director. "We were looking at a growth in the assessable base of under 2 percent."

"We didn't plan on a growth of any magnitude," Mr. Gallagher said.

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