City, state speak with one voice on tax break woes – to a point

Newly released letter addresses problems with historic credit

December 21, 2013|By Scott Calvert, The Baltimore Sun

Officials from Baltimore's finance office and the state assessments agency have been at odds — sometimes vocally so — over the accuracy of historic tax credits and who's to blame for bureaucratic confusion that has left hundreds of city property owners unsure of what they owe the tax collector.

But when the chairman of the Senate Budget and Taxation Committee asked for more information, the two agencies found a way to be on the same page, quite literally.

In late September, city finance director Harry E. Black and state assessments chief Robert E. Young began drafting a joint letter to Sen. Edward Kasemeyer, whose district incudes parts of Howard and Baltimore counties.

Among the issues it addressed was the city's discovery that 36 condos had been receiving historic credits that should never have been granted, whether because the condos weren't actually rehabs or because the building already got a discount.

In the first draft, Young said "it was unclear" if the city clearly told his agency the units didn't qualify.

But the city tweaked the wording twice to avoid any suggestion it was the city's fault. The second draft said it was "unclear whether the city and [state] were operating with the same information when performing their perspective roles." The final version, dated Oct. 17, simply said the two agencies "are continuing to work at resolving the issues affecting these properties."

The city released the various drafts and related records last week in response to a Public Information Act request from The Baltimore Sun. The core of the letter offered at least a partial explanation for what caused big swings this year on many legitimate historic rehab tax breaks in Baltimore.

It said the finance department used post-rehab values that in some cases didn't reflect later adjustments caused by assessment appeals, additional renovations or other factors. That, in turn, threw off the size of some tax credits.

For 315 property owners, this year's tax bills came with a nasty surprise: The city shrank their credits, sometimes substantially, driving up what they owed the city. In October, after getting more information from the state, the city revised more than 200 of the bills, and many owners saw their credits rise and tax bills fall.

Given the complexity of applying the historic credit, Black and Young told Kasemeyer that the city and state both see "the need for more effective interagency coordination and information sharing."

But just because they found some agreement didn't mean they saw eye to eye on why the wrong property values were used. Three weeks after signing the letter, the two men sparred at a City Council hearing, faulting each other's agency. Black said they would have to "agree to disagree."

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