Benefits districts to be asked to pay for tax error

Some council members call officials' decision unfair because city is to blame for residents' overpayments

May 30, 2008|By John Fritze | John Fritze,Sun reporter

Baltimore's benefits districts will be asked to pay for the cost of a property tax error that might have caused thousands of residents in Charles Village, Bolton Hill and other neighborhoods to overpay their tax bills, city officials told a City Council panel yesterday.

The decision, which the officials described as informal, sparked criticism from council members who argued that the city, not the benefits districts, is to blame for the error and that the districts are unable to afford refunds.

"That is unbelievably unfair to the districts that were operating on information provided by the city," said City Councilman William H. Cole IV, who represents residents of the Midtown Community Benefits District. "By doing that, you put a burden on the districts they can't possibly shoulder."

At issue is a special property tax charged by the Midtown district and the Charles Village Community Benefits District, which use the revenue to provide additional services. The city, which approves the tax rate for the districts and mails their bills, did not apply certain tax credits.

Charles Village benefits officials are expected to hold an emergency meeting next week to discuss the financial ramifications of the issue.

The cost of the error is unclear. City officials said they were waiting to see how many residents in the districts filed for refunds. The director of the Charles Village district did not return a call seeking comment.

State law sets a three-year statute of limitations on requesting tax refunds.

Helene Grady, deputy finance director for the city, said the cost of the rebates could be built into the next budget presented by the districts.

City Councilwoman Mary Pat Clarke, who represents residents in the Charles Village district, said that would raise taxes on the same people who are entitled to a refund.

"In my opinion," she said, "this is a city responsibility."

City records reviewed this year by The Sun suggest that the initial legislation that created the districts was changed specifically to allow the homestead credit and other credits to apply to the tax rate.

john.fritze@baltsun.com

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