What Baltimore needs to thrive: A local sales tax

July 21, 2011

For Baltimore to thrive in coming years, it must attract new residents and businesses — perhaps as many as 100,000 new jobs and residents each over the next two decades.

The populations most likely to fuel this growth are young professionals, empty-nesters and immigrants. To attract these populations, Baltimore requires a clear-eyed focus on improving livability.

That will require changing the regressive property tax through which the city currently finances its government, which is the highest in Maryland. The current tax rate discourages the very people who are most attracted to city living from investing in Baltimore, while failing to deliver satisfactory public safety and good public schools.

Any new administration should therefore seriously consider enacting a local sales tax of, say, 1 percent. The city could devote a significant portion of this revenue, say — maybe .75 percent — to reducing the property tax, with the remainder being used to finance bonds to support capital improvement projects such as renovating school buildings.

Such steps would make Baltimore a more desirable city to live in and encourage private investment.

Many cities, in both blue and red states, have enacted a local sales tax, including Atlanta, Miami, Los Angeles, Seattle, Indianapolis andBirmingham, Ala.

A local sales tax would prove particularly effective in Baltimore because the city lacks the power to generate new revenue by annexing county neighborhoods. A local sales tax would generate new revenue from people who work and play — but do not live — in the city.

A local sales tax whose rate can respond to changing public demands would create a framework for property tax relief and financing capital investments.

Enacted sensibly and linked to specific reforms, such a tax would hold the promise of delivering the improvements that are necessary to Baltimore's growth not only now but for years to come.

Michael Kroopnick, Baltimore

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