Property values rise slightly 1.2 percent increase seen for homeowners who are reassessed

Md. 'economy is still flat'

Notices go in mail today for one-third of house owners

December 27, 1996|By Larry Carson | Larry Carson,SUN STAFF

Property values are up only slightly for the average Maryland homeowner being reassessed in 1997 -- a sluggish 1.2 percent annual increase that will do little to swell local coffers with property tax revenue.

That's the picture that emerges as the state mails 654,000 assessment notices today in a fiscal ritual that affects a different third of Maryland's homeowners each year.

The new assessments will be reflected in property tax bills in July. They show an average statewide increase that contrasts sharply with the late 1980s and early 1990s, when assessments boomed by nearly 10 percent or more each year.

In 1997, a third of homeowners receiving notices will see their assessments stay the same or drop, said Ronald W. Wineholt, director of the state Department of Assessments and Taxation.

Another third could see their assessments increase a moderate 1 percent to 5 percent, he said. And while the rest will see their assessments rise higher, most will be shielded by local assessment limits imposed during the boom years for real estate values.

Local officials, taxpayers and business analysts differed widely yesterday in their opinions about what the 1997 assessments say about the Maryland economy.

Champe McCulloch, president of the Maryland Chamber of Commerce, said the slow rise in property values is a reflection of what he sees as Maryland's poor business climate -- something the chamber would change through a state income tax cut and regulatory reforms.

"The prospects are more of the same, until the state takes some more fundamental steps," he said.

John N. Bowers Jr., president of the Homebuilders Association of Maryland, said the situation for builders isn't good. "Maryland's economy is still quite flat," he said, adding that sales "are plugging along."

But Michael A. Conte, director of Towson State University's Regional Economic Studies Institute, said he believes the slow growth in assessments is caused mainly by a spike in interest rates during mid-1996.

If interest rates stay stable, "I'm looking for growth to pick up considerably in the coming year," he said.

Budget directors in Baltimore and Baltimore County said they expected the slight increase in assessments and saw no windfall or loss to their coffers as a result.

John D. O'Neill, Maryland Taxpayers' Association president, said that while he's worried about the one-third of homeowners whose assessments will rise more than 5 percent, "overall, it's acceptable."

The 1997 increases vary from a low of 0.2 percent in Worcester County to a high of 6.1 percent in Caroline County -- where Wineholt said state assessors "undershot" the market three years ago and had to compensate.

Talbot County has a zero assessment limit that keeps property taxes from rising.

In the Baltimore metropolitan area, average annual assessment growth rates varied from a low of 1.3 percent in Baltimore to a high of 2.3 percent in Harford County.

City Budget Director Edward J. Gallagher says reduced taxes from appeals of earlier assessments on commercial downtown real estate could cancel any gain the city gets from slightly higher assessments next year.

This year, for example, the city had to refund $5.1 million, and agree to collect $1.3 million less per year in property taxes for USF&G's downtown office tower. Another big tax appeal case, involving the $40 million Harborplace pavilions, is pending in tax court.

Baltimore County Budget Director Fred Homan said that although the slow growth "is good news for anyone who owns property," it means no unexpected new revenues to Baltimore County.

And with a 4 percent assessment limit like those in Baltimore City and Anne Arundel County, Baltimore County will lose $5.8 million it would have collected next year from homeowners whose property values are growing fast enough to exceed the limit.

Howard County has a 5 percent cap, while Carroll and Harford are at the 10 percent ceiling mandated by state law.

In Harford County, assessments supervisor C. John Sullivan attributed the relatively large increase to the assessment of property in the county's "development corridor" along Route 24 near Interstate 95. "That's our largest and fastest growing area," he said.

In Howard County, Kent T. Finkelsen, assistant supervisor of assessments, said, "The market is still fairly flat" -- explaining the virtually unchanged growth in assessments this year in eastern Ellicott City and East Columbia, the area examined.

In Anne Arundel, where the average annual growth rate rose slightly from last year, assessment supervisor William F. Smouse said that homes are selling, but not appreciating in value.

"A house that we valued at $400,000 three years ago might sell for $375,000 now," he said. "It's a buyer's market now."

Assessments in the Washington suburbs of Prince George's and Montgomery counties grew by averages of 0.3 percent and 1 percent, respectively, slightly less than those around Baltimore.

I;

Average property assessment increases by jurisdiction

Allegany .. .. .. .. .. .. ..3.5%

Anne Arundel . .. .. .. .. ..1.5%

Baltimore City .. .. .. .. ..1.3%

Baltimore County ... .. .. ..1.4%

Calvert .. .. .. ... .. .. ..1.0%

Caroline . .. .. ... .. .. ..6.1%

Carroll .. .. .. ... .. .. ..2.0%

Cecil .. . .. .. ... .. .. ..1.0%

Charles .. .. .. ... .. .. ..1.2%

Dorchester .. .. ... .. .. ..0.8%

Frederick ... .. ... .. .. ..0.7%

Garrett .. .. .. ... .. .. ..2.7%

Harford .. .. .. ... .. .. ..2.3%

Howard ... .. .. ... .. .. ..1.5%

Kent .. .. .. .. ... .. .. ..1.6%

Montgomery .. .. ... .. .. ..1.0%

Prince George's .... .. .. ..0.3%

Queen Anne's .. .... .. .. ..1.5%

St. Mary's.. .. .... .. .. ..2.2%

Somerset .. .. .. .. .. .. ..1.6%

Talbot .. . .. .. .. .. .. ..2.1%

Washington ... .. .. .. .. ..2.2%

Wicomico .. .. .. .. .. .. ..2.0%

Worcester . .. .. .. .. .. ..0.2%

Pub Date: 12/27/96

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