Mintz proposes cutting property tax, raising piggyback rate BALTIMORE COUNTY

April 27, 1993|By Larry Carson | Larry Carson,Staff Writer

The Sun reported incorrectly yesterday the effective date of possible increase in the Baltimore County piggyback tax. The County Council could raise the rate effective Jan. 1, 1994, not before. The error was based on incorrect information from Marvin Bond, spokesman for state Comptroller Louis L. Goldstein.

The Sun regrets the errors

Rather than look for cuts in an already-tight budget, a Pikesville councilman is asking his Baltimore County colleagues to consider a trade: a 1 percentage point rise in the county's share of the piggyback income tax for a 3.5 cent cut in the property tax rate.

Melvin G. Mintz, D-2nd, said his plan would bring in about $5.1 million a year.

His colleagues remain skeptical. And a county budget analyst believes the plan would end up costing taxpayers.

The plan will be one of the options before the council as it considers County Executive Roger B. Hayden's proposed $1.1 billion budget. The council will hold the public budget hearing at Loch Raven Senior High on Tuesday, May 4. Any cuts or swaps will be voted on May 26.


The council can cut the budget, but not add to it, and can raise the piggyback income tax rate as high as 60 percent of the state tax.

According to Mr. Mintz's memo, increasing the current piggyback income tax rate from 55 percent to 56 percent would bring in about $5.1 million a year. A penny of the property tax rate roughly equals $1.5 million in revenue. So the county could cut 3.5 cents off the property tax rate and break even, Mr. Mintz said.

Mr. Mintz would not discuss his plan except to say, "I've always been looking for ways to shift the [tax] burden." He and others have said they want to put more emphasis on the income tax because it's based on ability to pay, while the property tax ignores a taxpayer's income.

A major obstacle is when the plan would take effect. The property tax is based on a fiscal year, which runs from July 1 to June 30. The income tax is based on a calendar year. There's no way to match the two.

The council could raise the income tax rate retroactively, starting Jan. 1, 1993, said Marvin Bond, spokesman for state Comptroller Louis L. Goldstein. That would produce a small revenue windfall because property tax rates wouldn't drop until July 1, 1993.

By raising the piggyback income tax rate as of Jan. 1, 1994, the county would only get half a year's additional revenue during the next fiscal year and would lose a year's worth of property taxes, said Keith A. Dorsey, the county's budget analyst. This would leave a $3 million gap.

Also, Mr. Hayden has urged council members to resist the political temptation to cut the property tax rate when the county is still dealing with the recession's effects. In February, Mr. Hayden eliminated 566 county jobs and closed nine libraries, four senior centers and two health centers.

"Now is not the time to do anything to create confusion in the public's mind," he said.

Berchie Lee Manley, R-1st, who represents Catonsville, agrees with Mr. Hayden.

"I'm not considering it," she said of Mr. Mintz's plan.

Vincent J. Gardina, D-5th, who represents Perry Hall, said a greater dependance on income taxes would be "moving towards affordability and moving away from stability." Income taxes vary according to the economy; property taxes "are a rock" and can be counted on, he said.

Other council members wonder how voters will react to two years of income tax increases when they vote next year. The county raised the income tax rate from 50 percent to 55 percent of the state share last spring. The property tax rate remained unchanged at $2.865 per $100 of assessed value. Still, county budget officials estimate the average property tax bill will rise $32.

Mr. Dorsey said the Mintz plan would likely cost taxpayers more than they would save. A county resident earning $60,000 a year and living in a house valued at $112,500 would pay $21.60 more in income taxes; the property tax bill would drop only $15.75, he said.

A person earning $200,000 a year and living in a house worth $350,000 would pay $76 more in annual income taxes; the property tax bill would drop $52.50. Those who could benefit most from Mr. Mintz's plan are people with expensive homes and low incomes, he said.

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