Effort to slash taxes fails

Council readies city budget with modest rate cut

June 06, 2006|By JOHN FRITZE | JOHN FRITZE,SUN REPORTER

Efforts by several City Council members to make deep reductions in Baltimore's property tax rate all but died yesterday after the city's $2.4 billion budget advanced with a more modest tax cut, setting it up for final approval later this month.

With Baltimore's budget at its strongest in decades, City Council members had drafted legislation to slash the property tax rate beyond a 2-cent cut proposed by Mayor Martin O'Malley. But those measures - which prompted contentious debate in an otherwise benign budget process - failed to muster enough votes, and supporters said yesterday that time has run out.

As the deeper tax cuts were essentially wiped off the table yesterday, last-minute wrangling delivered an additional $3.9 million for after-school and other children's programs - money that officials expect to find left over in the current budget. The city's budget plan, which will increase spending by 3.4 percent over this year, comes up for final vote Monday.

"As much as I think we're sensitive to the property tax rate, we have to look forward to the next generation," said Council Vice President Stephanie C. Rawlings Blake, who chairs the council's Budget and Appropriations Committee. "We can't mortgage their future on a few cents off property taxes."

Under the budget approved by the committee yesterday, the city's tax rate - the highest in Maryland - would drop 2 cents per $100 of assessed value in the fiscal year that begins July 1. For a home assessed at $150,000, the proposal would save the homeowner about $30.

Supporters of the deeper property tax-cut proposals - which ranged from a 5-cent to an 11-cent reduction - said residents should be rewarded now that the city has posted budget surpluses for two consecutive years. But critics countered that the proposals offered little guidance for how City Hall would pay for the additional revenue reduction.

"You've got to take money out of the budget to give a tax cut," said Councilman James B. Kraft, who had proposed using future surpluses to fund an 11-cent cut. "We looked over and over the budget. ... How do you determine that you only need six guys to pick up the trash instead of eight?"

Several council members, including Kraft, are likely to attempt to amend their tax reductions to the budget when it receives a final vote next week - the only way the measures could be considered. But council leaders suggested those efforts would not likely have the votes to succeed.

Instead, Council President Sheila Dixon said officials are considering a task force that would study the property tax system more broadly - including home assessments, which are made by the state - rather than "haphazardly" cutting the rate by piecemeal amounts.

Property taxes are the city's largest source of revenue and are expected to bring $592.1 million into the general fund next fiscal year, a 6.5 percent increase over the current budget. That projected increase is largely based on rising home values, which can drive up a tax bill even if the rate remains constant or drops slightly.

Beyond property taxes, few council members have openly quibbled with the budget, which will direct millions more to city agencies. Part of the additional revenue the city received in the current year will be used for more after-school programs. The administration agreed yesterday to spend an additional $3.9 million from surplus money for those programs.

"We feel like there was some definite leadership that came out of the council," said Erin Coleman of the Safe & Sound Campaign, an umbrella group that regularly lobbies for children's programs. "We look forward to the year that we are not fighting [for money]."

john.fritze@baltsun.com

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