Property tax cut is OK'd

Modest decrease will likely get official approval next week

May 19, 2006|By JOSH MITCHELL | JOSH MITCHELL,SUN REPORTER

The Baltimore County Council ended two weeks of budget meetings yesterday by agreeing to a modest cut in the property tax rate.

Council members came to an informal consensus in favor of a 1 1/2 -cent cut in the rate - which would save the owner of a $200,000 home about $30 a year in taxes - that would be on top of a small tax break for senior citizens and residents on fixed incomes.

Council members said they wanted to provide relief to homeowners facing soaring property assessments, higher gasoline prices and a pending increase in electricity rates.

"It's just a little way to give something back to the taxpayers, and better in their pockets than county coffers," said Councilman Stephen G. Samuel Moxley, a Catonsville Democrat.

To make room for the tax cut, the council shuffled about $8.4 million from other parts of County Executive James T. Smith Jr.'s proposed $1.6 billion general fund operating budget for fiscal year 2007. The council is set to approve the spending plan Thursday, and that vote will be the final word on the budget.

Most of the money for the tax relief, about $5 million, would come from a reserve health insurance account. To pay for the rest of the cut, the council made smaller cuts in other government agencies and halved a $3 million tax credit program proposed by Smith that would benefit senior citizens and others on fixed incomes.

The council opted to combine some aspects of Smith's program with a proposal by Councilman T. Bryan McIntire that would have provided tax credits solely to seniors. The new proposal would spread about $1.3 million in credits to about 9,000 seniors and residents on fixed incomes. The credits would vary depending on a homeowner's income, net worth and the value of the property.

Donald I. Mohler, a spokesman for Smith, did not say whether the administration was in favor of the council's proposed changes.

"Obviously the administration has been very conservative in its fiscal approach," Mohler said. "But the county executive is very respectful in ... recognizing the responsibility of the council to look carefully at the budget."

County Auditor Brian J. Rowe said the reserve health insurance fund is typically set aside in case health insurance costs are higher than expected. But he said fund would be "moot" because of the county's $237 million surplus.

The county's piggyback income tax rate would remain at 2.83 percent.

The property tax rate was last changed in 2001, when it was lowered from $1.142 to $1.115 per $100 of assessed value.

The county caps assessment increases at 4 percent, but even with the cap, the average homeowner's tax bill is projected to increase from $1,706 to $1,788 for the fiscal year that begins in July.

The council agreed on the cut yesterday after assurances from Rowe and county budget director Fred Homan that the cut would not jeopardize the county's AAA bond rating.

"With reserves and the surplus that we have, there's no reason to overtax the citizens in Baltimore County when you don't need to," Councilman Joseph Bartenfelder said.

josh.mitchell@baltsun.com

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