Acting one week before elections, the Howard County Council yesterday unanimously approved what may be Maryland's most generous tax cut for homeowners 70 and older.
The bill, sponsored by two County Council Republicans, including council Chairman Christopher J. Merdon - the party's nominee for county executive - would cut 25 percent from a homeowner's July 1 property tax bill and freeze it at that level until the house is sold. To qualify, a person must be at least 70 years old and have an annual household income of less than $75,000. Residents would have to reapply each year.
For a qualified applicant with a $4,000 tax bill, the measure would cut $1,000, freezing the bill at $3,000 as long as the person owned the house. On average, however, County Auditor Ronald Weinstein said, the bill would represent an $811 reduction on a $2,842 bill.
The credit could cost the county, which has a $1.2 billion budget, up to $4 million a year in revenue, the sponsors say. County Executive James N. Robey is expected to sign the bill into law, though its provisions would not apply until property tax bills go out July 1.
Officials at the Maryland Association of Counties and in Maryland's largest metropolitan jurisdictions said they know of no larger tax cut available to seniors in the state, though no poll has been done.
Targeted property tax relief is popular nationally, said Sam Batkins, a spokesman for the National Taxpayers Union.
"Nationally and locally, we have pushed for lower taxes on everybody. A lot of our members are seniors who call and write us frequently about how their assessments have gone up 15 or 20 percent. I'm glad to see counties like Howard County taking the step," he said.
Other Maryland counties have moved to help older homeowners in the past few years, but most have slightly expanded a state property tax credit program aimed at low-income homeowners.
The Montgomery County Council is set to vote today on a bill that would give the average homeowner who qualifies for the state tax credit program an added $250 to $300 in relief. In Southern Maryland, St. Mary's County has a program that matches the state program's tax credit for those who qualify.
But Howard County's approach was criticized yesterday by conservative activist Grover G. Norquist, president of Washington-based Americans for Tax Reform, who said that while any tax cut is better than none, targeted relief merely makes it harder to reduce tax rates for everyone.
"This is a tax cut designed to cut taxes on high-propensity voters while [harming] low-propensity voters, while making broader tax cuts in the future more difficult. You're not being nice to seniors. You're picking the people who remember to vote," Norquist said.
Still, election year tax cuts are always a popular, if transparent, ploy for politicians. It works, said Matt Crenson, a political science professor at the Johns Hopkins University, for a very basic reason.
"Because the money is real. This is one policy whose outcome is virtually a certainty. It's not a promise - it's a gift," Crenson said.
Ellicott City resident Robert Garber, 79, however, noted that keeping senior citizens in the county makes fiscal sense.
"A lot of seniors are leaving because the taxes are going so high. When they leave, young families with children come in and the result is more of a burden," said Garber, who has testified in favor of the bill.
Scores of Howard seniors have testified in favor of the bill, though members of the county's Commission on Aging had lots of questions about the rush to enact the measure before the election. They urged delay and more study.
The council's majority Democrats - including Ken Ulman, the Democratic nominee for county executive - tabled the bill Oct. 3 and drew up amendments to limit the benefit to lower-income people, but he backed off yesterday for fear amendments might kill the popular bill.
"It went through clean. I'm very pleased," said Merdon, who has mailed several campaign brochures advertising his link to the bill. Ulman said that if he is elected executive, he would take another look at the measure.
Cathy Stefano, a senior who testified for the tax cut, watched from the audience. "I'm happy. I'm very happy," she said.
The move comes despite a 3-cent cut in Howard's general property tax rate this year and after enactment last year of a bill that allows seniors ages 65 and older with the same income limits to defer all future property tax increases until their house is sold. Many don't like that program, however, because it involves a lien on their property for the debt.
Joe DeMattos, Maryland state director for AARP, said the group backed tax relief for seniors in the General Assembly this year. He said any measure that helps seniors stay in their homes and engaged in their communities is welcome.
With the sharp increase in home prices over the past five years, "many older Maryland residents have become house rich and cash poor," he said, adding a caution, however, that tax relief should not reduce revenue so much that it would hurt services in the next recession.
Donald F. Norris, a public policy professor at University of Maryland, Baltimore County, called the tax-cut bill "shameless pandering of older folks. On what basis does one group of a society get a tax break when other people don't get it?"