City Council maneuvers unintentionally reduce 1999 property tax rate Average homeowner will save $6 with 3-cent reduction

June 16, 1998|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

Baltimore residents will pay slightly less in property taxes next year under the city's first property tax cut since 1994.

Though it was not intended, the City Council lowered the tax by 3 cents last night, a savings of about $6 for the average homeowner, to $5.82 per $100 of assessed value.

The property tax reduction was a last-minute maneuver by council members who cut the mayor's proposed $1.8 billion budget by $2.3 million, hoping to force him to increase funding for recreation centers and hire additional police officers.

But Mayor Kurt L. Schmoke told the council yesterday that the city charter prevented him from funding their projects.

He told them they had two alternatives: Leave the tax rate as it was and put the $2.3 million extra revenue it would generate into a surplus account to be spent in 2000; or cut the property tax by the same amount in 1999.

"I have nothing to brag about," said East Baltimore Councilwoman Paula Johnson-Branch, who reluctantly voted for the tax cut after presented with the mayor's two options. "It was not the intention of the council to cut the property tax rate."

The city charter says that the elected officials have to have a balanced budget. If the property tax generates more money than is needed to operate the local government, then the surplus must be put into a fund to be spent in the next fiscal year.

The charter provision is meant to discourage the council and the mayor from charging residents high property taxes and using the extra money generated as a ready-made surplus.

For several weeks, the council has been wrangling with the mayor over the budget. Last night's action was the final step in certifying the city's spending plan for fiscal year 1999, which vTC begins July 1.

Though the mayor has continually said that the city can't afford a property tax reduction, he said last night, "I am pleased that the council supported a tax reduction."

It seems that few of the council members were happy with the way budget negotiations turned out. Some wanted to cut the property tax by more, some wanted to fund special projects while others wanted to leave the mayor's proposed budget intact.

"I'm disappointed in this whole year," said Northeast Baltimore Councilman Martin O'Malley. "There should have been greater will in the council to make greater changes in the budget to improve recreation and safety and offer a larger tax cut."

During a special council meeting Thursday on the budget, O'Malley led the effort to cut $2.35 million from the mayor's proposal. The council cut $2 million from the self-insurance fund and $350,000 that was to fund a study for a new Baltimore Arena.

Council members could have voted to restore some or part of those cuts but the restorations lacked enough supporters.

Other than the property tax cut, the council approved yesterday a budget with few substantive changes to the mayor's proposal in a year in which the city has $60 million extra from increased tax collections.

Baltimore will add about 52 police officers and provide $7 million in salary increases for police and fire employees.

The city will fund capital improvement projects, including a $17 million upgrade to BRESCO, the city's incinerator.

For the average homeowner, the property tax cut is more symbolic than financial relief.

A $55,200 house that is assessed at $21,416 would pay $1,252.84 at the current property tax rate. Next year the homeowners will pay $1,246.41, according to city budget officials.

Pub Date: 6/16/98

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