Baltimore state Sen. George W. Della Jr. acknowledged Thursday that he received an undeserved tax break by wrongly applying the state's Homestead Property Tax Credit to both his Federal Hill townhouse and a home in Baltimore County.
Della, a Democrat, said he has contacted state and county officials and requested that he and his wife be billed for the $1,184 in back taxes he owes from the Baltimore County property.
The seven-term senator represents all of Baltimore's waterfront neighborhoods and is locked in one of the tightest contests of his political career against a young, well-funded opponent, Bill Ferguson, who first noted the inappropriate tax breaks in a recent campaign mailing. The tax break is intended to reduce homeowners' payments for their primary residences.
"It came to my attention," Della said in an interview, in which he characterized the underpayment as a mistake. "My response is, well, you know, that shouldn't be. You are not supposed to get two homestead tax credits."
Ferguson said he is "disappointed" with Della's choices.
"I just keep thinking back to when I was teaching in a classroom without a doorknob, and Della was evading the tax law" said Ferguson, who first came to Baltimore with the Teach for America program.
Baltimore developer Patrick Turner, who says his projects have been threatened by Della's legislation, has also highlighted the issue in a full-page advertisement that he took out in the Baltimore Guide, a newsletter delivered to bars and restaurants. Under the header "George Della's Reprehensible Behavior" the mailer lists "double-dipping" as "illegal."
The tax break, known as the Homestead Tax Credit, is a program intended to soften the blow of rising assessments — and tax bills — when property values spike. The state caps taxable assessment increases at 10 percent each year. The city and Baltimore County both cap increases at 4 percent.
The credit can be applied to only one residence, but for years many Marylanders inadvertently double-dipped because the state automatically capped assessment on all newly purchased houses. Della voted along with all his colleagues in 2007 to change the law so residents need to proactively apply for it, a move officials hoped would allow the state to recapture millions in uncollected taxes.
After that law took effect, state records show Della benefited from tax credits over two years on a second home in Baltimore County while he was also accepting thousands of dollars in tax breaks for his Baltimore City house. The senator blamed the problem on his wife, Lorna, who applied for the credit for the Baltimore County home in January 2008.
Della said she lives full time in Baltimore County, and pays the taxes at that home. "They should send her a revised real property tax bill," Della said. "And she is going to pay it."
There is no penalty for using the credit twice, said Robert E. Young, the acting director of the State Department of Assessments and Taxation. "When we learn of these things we go back and cancel credits," he said. In 2008, The Baltimore Sun found seven Baltimore-area lawmakers who used the tax credit for more than one residence.
Young said Della did not sign the application for the credit, which he was required to do, and the state had informed the couple that their paperwork was out of order. Because the Dellas never replied, the tax credit on the Hampstead property was scheduled to be rescinded Sept. 22.
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