Annapolis' case against county fails City residents likely to pay higher property taxes July 1

'It's a fair decision'

Door left open for individuals to appeal in state court

June 13, 1996|By A SUN STAFF WRITER

Annapolis lost its legal fight yesterday against top Anne Arundel officials, ending six weeks of charged politics and posturing while virtually assuring that city residents will pay higher property taxes come July 1.

Subtly condemning the debate's political undertones, Anne Arundel Circuit Judge James C. Cawood Jr., paraphrased the late sports writer Grantland Rice to set out his decision: "Our duty in the current dispute is to determine 'how appropriately they played the game.' "

In doing so, the judge rejected the core of the city's claim: that county officials failed to inform the Annapolis city council of an 8-cent property tax rate increase before announcing it May 1.

Also, the judge said, Mayor Alfred A. Hopkins should have accepted the County Council's invitation to argue against the proposal days before members approved the tax rate for the coming fiscal year. The mayor's refusal to testify infuriated County Council members, resulting in Annapolis losing $158,000 grant money from the county budget.

Judge Cawood did not rule on whether Annapolis residents are paying too much in local taxes. That leaves the door open for individual Annapolis property owners to appeal their tax bills in Maryland Tax Court, and sets the stage for another fight between county and city officials over the same issue a year from now.

"With most of the cases we have been dealing with, individuals are at controversy, which is often disastrous to them," Judge Cawood wrote in a six-page opinion. "When governing bodies are at loggerheads, the result, though not immediate, affects more people adversely."

In his budget for the fiscal year beginning July 1, County Executive John G. Gary proposed raising the Annapolis property tax rate 8 cents. The new rate will raise $760,000 for Anne Arundel by reducing the tax credit Annapolis property owners receive for the public services the city provides.

Last week, the city council effectively cut the increase in half by approving a city budget that includes a 4-cent property tax rate reduction. The new rate for city property owners of $3.27 per $100 of assessed value will add roughly $40 to the average property tax bill in Annapolis.

The dispute over how much credit Annapolis should receive for public services, known as the "tax differential," dates back 21 years. A 1975 lawsuit filed by Annapolis taxpayers against the county reaffirmed the authority of the county to set the tax credit. But the criteria county officials use for establishing the rate have prompted perennial debate.

City officials argue that the 39,000 Annapolis residents are paying more than their share for countywide municipal services, including public schools and safety. But with education costs rising, and with the construction of a $62 million county courthouse and a $27.9 million jail in Glen Burnie, county officials have said Annapolis taxpayers must contribute more.

Annapolis officials, some of whom said they were not surprised by the court's rebuff, indicated yesterday they would not appeal Cawood's decision. The city council will decide in the next few days whether to file a challenge in the Court of Special Appeals and whether to pay for private citizens to bring individual claims in state Tax Court.

Meanwhile, county attorneys, who spent more than 60 hours fighting the city's suit, will consider whether to sue for legal expenses. "I'm sure the general taxpayer is wondering why city and county money is being spent on these kinds of things," said David A. Plymyer, deputy county attorney.

Several city officials, who weeks ago claimed Annapolis was the victim of county greed, moved quickly to calm turbulent waters and even placed blame for the failed suit on city staff and council colleagues.

"I always felt that suing the county was like suing a sibling -- you may win, but in the long run you still lose," said Alderman M. Theresa DeGraff, a Ward 7 Republican. "I never thought we looked at court as a last resort, more as a first resort. And that's bad business."

The political clash threatens a number of joint road, redevelopment and public safety projects. They include widening Forest Drive, refurbishing Clay Street and turning the historic Wiley H. Bates High School into a community center.

"It's a fair decision, and one that focused on the issues before the court," said Alderman Carl O. Snowden, a Ward 5 Democrat.

He said an appeal would be fruitless: "Clearly, I don't think our staff was correct on this."

Hopkins, whose failure to disclose a March meeting with Gary where the tax differential was discussed, said in a written statement: "Although I continue to fervently believe in the fundamental correctness of our position, I also acknowledge the decision of the court and will honor that decision. Life must go on."

Hopkins said he called Gary after the ruling and "pledged the city's cooperation in a number of projects."

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