Search is on after Baltimore agency can't locate tax credit records

Officials look for proof that 76 city property owners deserve historic tax credits

August 17, 2012|By Scott Calvert

For weeks city and state officials have been on a scavenger hunt. Their goal: To track down documents, if they exist, showing that 76 property owners in Baltimore have been legitimately receiving hundreds of thousands of dollars in discounts on local property tax bills.

The search began after the city office responsible for approving the historic property tax credit was unable to locate key records. Those records would prove that the properties’ owners had received “final certification” needed to qualify for a 10-year tax break on historic rehabs.

Around 1,200 properties in Baltimore benefit from the historic tax credit. So the lack of documents for the 76 means that the city Commission for Historical and Architectural Preservation, which oversees the program, couldn’t prove that 6 percent of recipients actually deserved the generous break.

CHAP sends a copy of each final certification to both the city’s Finance Department and the state Department of Assessments and Taxation. The property owner gets a copy, too. If the city were to find a credit was erroneously issued, it would likely bill the owner for years of back taxes.

Going into the hunt, there were two possible outcomes for each property: Either CHAP lost the paperwork, or the owner never should’ve gotten the credit — something our previous reporting shows happened in five instances due to coding errors by the state assessments agency.

On Thursday the city gave an update on its search. “Presently, we have verified initial certification, final certification, or both (initial and final certification) for 37 of the 76 properties,” Deputy Finance Director Henry Raymond said by email. The search should take another two weeks, he added.

The state assessments agency, which calculates tax credits for the city, has reviewed 58 of the 76 properties and found certification records in its files for 16, said Owen C. Charles, deputy director.

CHAP executive director Kathleen G. Kotarba would not explain how her office had lost records.

The records hunt is the latest sign of problems with property tax credits to emerge since The Sun’s Taxing Baltimore series began in December. The Sun has found that the city lost out on more than $13 million in potential tax revenue over several years because of problems ranging from lax oversight of the homestead tax credit to the state’s undervaluing of unsold waterfront condos.

The city is reviewing all state tax credit calculations “to ensure present and future accuracy of our tax bills and credits,” Raymond said. The city will work with the state over the next year “to cleanse all of the errors caused by inaccurate state tax credit data” with a goal of having “all accounts audited and adjusted prior to the next tax bill cycle.”

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