Assessment method in question

Md. attorney general to rule on legality of change by panel

New state law at issue

Critics fear residents may be exposed to property tax rise


January 31, 2001|By Laura Vozzella | Laura Vozzella,SUN STAFF

The state attorney general's office is trying to determine if a new Maryland law forced the Columbia Association to change the way it assesses property, or if the change was unnecessary and illegal.

The office is formulating a legal opinion on the matter at the request of Del. Shane Pendergrass, a Democrat who lives in Columbia.

The Columbia Council voted Dec. 21 to assess property at 100 percent of valuation rather than 50 percent, saying the change was needed to comply with the Truth in Taxation law.

The change does not affect the amount Columbia residents will be charged on their next assessment bills because the council also voted to cut the lien rate in half.

But some council members said the resolution opens the door to huge assessment increases in the future because it allows the council to circumvent an assessment cap intended to limit how high Columbia's equivalent of property taxes can rise.

Critics of the move say lien payers should not be exposed to the risk of higher assessments because, they contend, the new law does not apply to the Columbia Association.

That was the finding of the attorney general's office in June, when it issued a "letter of advice" on the matter. The letter said the law did not apply to the private homeowners association because it is not a municipal or county government.

The official opinion Pendergrass is seeking has more weight than such advice because it is more thoroughly researched and personally signed by the attorney general, as opposed to one of his assistants.

Pendergrass, who had sought advice and distributed the letter last summer to Columbia Council members, said she was surprised and concerned by the council's December vote.

"I thought the advice was pretty clear: It said the Columbia Association was not in this legislation," she said. " I think people felt confident knowing there was a ceiling there. And my constituents and I will feel uncomfortable knowing it's not there."

In an interview after the council's action in December, Assistant Attorney General Robert A. Zarnoch questioned the Columbia Association's authority to assess property at anything other than 50 percent valuation, as dictated by state law for more than 20 years. Zarnoch wrote the June letter of advice.

Zarnoch and other representatives of the attorney general's office met Friday with lawyers for the Columbia Association, including David H. Bamberger, to discuss the matter.

"We asked a lot of questions, and I think we're better informed as to what the arguments are to the contrary," Zarnoch said. "We didn't come out and say, `OK, we're completely wrong.' ... I don't think anybody declared error - not yet anyway. Maybe not ever."

Zarnoch said it normally takes 10 weeks to draft an opinion, but he does not expect this case to take that long.

Bamberger, who contends that the association does have the right to make the change, described the meeting as "very cordial and friendly."

"We'll have to await any action they decide to take," he said.

An opinion from the attorney general's office does not have the force of law, but it could have an impact if the matter goes to court, Zarnoch said.

"Courts can find them persuasive in interpreting the law, but they're not bound by them," Zarnoch said.

Under the Truth in Taxation law, which took effect Oct. 1, local governments tax residential and business properties at 100 percent of their assessed value instead of at a percentage of that value.

The measure was intended to simplify confusing assessment notices and attract businesses to Maryland by helping the state fare better in national tax-rate rankings.

The law was not intended to affect the amount taxpayers are charged because it was coupled with corresponding decreases in tax rates. Taxpayers in towns and counties across the state will pay no more because their tax rates were cut in half to offset doubling the assessment base.

But in Columbia, the change has the potential to affect how much people pay because it creates a loophole around the community's long-standing limit on assessments.

Columbia assessments are capped, under legally enforceable covenants, at 75 cents per $100 of assessed valuation.

When the council voted in December to assesses property at 100 percent instead of 50 percent, it also cut the lien rate in half. It was reduced from 73 cents - 2 cents below the 75-cent maximum - to 36.5 cents.

That means Columbians will pay no more on their next assessment bills. But, some council members warned, it also means the council suddenly has a lot more than 2 cents to play with in setting the lien rate.

They say the council is free to raise the rate as high as 75 cents - now based on 100 percent valuation - effectively doubling the amount people pay.

Many council members say a dramatic increase in lien rates is unlikely. But at least one, Councilman Kirk Halpin of Kings Contrivance, has said the Columbia Association may want to use the loophole to raise assessments some day.

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