Schmoke wants to cut property tax

January 13, 1995|By Eric Siegel | Eric Siegel,Sun Staff Writer

Saying he wanted to signal the city's concern for middle-class homeowners, Baltimore Mayor Kurt L. Schmoke yesterday proposed cutting 20 cents off the real estate tax rate by the end of the decade.

But the mayor added that his plan for annual nickel reductions would not begin until July 1996, and could be affected by budget pressures.

The reductions -- lowering Baltimore's rate to $5.65 per $100 of assessed value by 1999 -- would still leave the city with the highest property tax rate by far in the metropolitan area. If put into effect, they would cut the annual property tax bill on a home with a market value of $100,000 from $2,340 to $2,260.

Mr. Schmoke said his tax-reduction plan was contingent on the state taking over financing of Circuit Court operations, and on the city's success in cutting costs.

Mr. Schmoke said he is not proposing a tax cut for the fiscal year that begins in July because of uncertainty over the new Republican-controlled Congress. "With the Republican revolution in Washington, we think it's prudent to wait at least one fiscal year before commiting to this kind of reduction."

The mayor's decision to delay his tax cut plan drew criticism from some key City Council members.

Council President Mary Pat Clarke, who plans to challenge Mr. Schmoke's bid for a third term this year, said Baltimore should cut its property tax annually until the city rate is no more than 50 percent higher than Baltimore County's rate, $2.855 per $100 of assessed value.

The council, she said, would be willing to work with the mayor to identify budget cuts needed to shave the property tax a nickel beginning in July. But she said she would not push a tax cut on her own.

"I'm not going to thumb-wrestle over a nickel," she said.

Council members Joseph J. DiBlasi, the budget committee co-chair, and Martin O'Malley also said they favored an immediate tax cut.

"There's no reason we can't continue a nickel-a-year cut right now," said Mr. DiBlasi, a 6th District Democrat running for council president.

"I think if we just got in the habit of doing this every year, we'd be better off," added Mr. O'Malley, a 3rd District Democrat who has consistently favored tax reductions.

Daniel J. Loden, head of the Baltimore Homeowners' Coalition for Fair Property Taxes, said he understood the mayor's concerns. But, he said it was premature to give up on the possibility of a tax cut this year.

Since he took office in 1987, Mr. Schmoke has presided over three 5-cent cuts in the property tax rate.

In 1993, the mayor engaged in a budget battle with the council. By vetoing the budget for the first time in memory, he defeated the council's move to cut the tax rate.

Last year, Mr. Schmoke did not propose a property tax cut in his budget. But after the council met his challenge to find the savings needed to compensate for a cut, the mayor supported reducing the rate 5 cents, to the current $5.85 per $100 of assessed value.

Each nickel cut in the property tax rate costs the city about $4 million in revenue. The property tax is the largest single source of money in the the city's $800 million general fund. The general fund is the principal source of operating money for the city, which has a budget of $2 billion a year.

Yesterday, Mr. Schmoke conceded the city was "in a bind" over the tax issue.

"Obviously, we need the resources but we're also trying to retain middle-class homeowners," Mr. Schmoke said. "By providing a modest property tax relief, we do send a signal that we're concerned about our property-tax payers."

The state takeover of the operation of Baltimore Circuit Court would save the city $6 million a year. Gov.-elect Parris N. Glendening has said that he supported the idea, adding that he didn't know whether the state could do that immediately.

The city would also try to save money over the next several years by cutting energy costs and employee health care costs, the mayor said.

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