Blaming a weak economy and shaky revenues, Mayor Sheila Dixon is abandoning a long-standing plan to cut 2 cents this year from Baltimore's highest-in-the-state property tax rate.
The annual cut - which has been made each of the past three years - was supposed to knock 10 cents off the tax rate over a five-year period. The reductions have become a primary means to provide tax relief to city property owners.
Baltimore's property tax rate is by far the highest in Maryland - more than twice Baltimore County's - and a broad spectrum of city officials have acknowledged that the tax may be stifling growth and threatening homeowners on fixed incomes.
As recently as last month, Dixon planned to go forward with the cut - it was included in her budget proposal for the fiscal year that begins July 1.
But a spokesman for Dixon said that the city now expects to receive far less revenue than anticipated for the proposed $2.92 billion budget. The best way to close that gap, he said, is to forgo the tax break.
"This is not a position that the mayor or the finance director or anyone else in the city wants to be in," said the spokesman, Sterling Clifford. "It's at a point where one commitment meets another in the reality of a declining economy and housing market."
In 2005, then-Mayor Martin O'Malley announced the five-year reduction plan, and Dixon continued it in her first budget. Dixon, who was City Council president at the time, was cautious about the proposal, arguing that the city would have to "assess it every year."
The prospects for a return of the 2-cent cut next year were unclear.
Keith Losoya, a community liaison for the Baltimore TEA Party, a nonprofit whose acronym stands for Tax Education and Action, said the city should have been more frugal with surplus money it collected in recent years so that taxpayers could still have received a break when times turned tough.
"Politicians run on property tax relief and tax cuts, and it doesn't happen. How are we supposed to feel about these promises?" said Losoya, who ran for the state Senate in 2006. "It doesn't do anything to improve the level of trust."
Had the tax break gone forward, it would have reduced the rate from $2.268 per $100 of assessed value to $2.248 per $100 - an annual savings of about $60 on a home assessed at $300,000. The cumulative savings on that same property over five years would have been $900.
