Assessment Increases

As Howard County struggles with a possible $12 million budget shortfall, the County Council chairman is proposing a measure that would allow the county to collect more property tax revenue without raising the tax rate.C. Vernon Gray, D-3rd, plans to introduce an amendment to an assessment cap bill sponsored by County Executive Charles I. Ecker that comes up for a vote tonight.Ecker's bill would cap property tax assessment increases at 5 percent a year, but Gray's amendment would make the limit 10 percent a year.

Downtown tenants have no say regarding a surcharge for services imposed on their landlords and passed through to them under their leases ("Offices in city face rise in fees," April 20). But they can vote with their feet and move from downtown or the city altogether. Over the years the city has become less and less attractive as a place to locate or maintain a business due to parking costs, traffic congestion, crime and panhandlers. Numerous businesses have left for the suburbs.

Anne Arundel County's leading tax rebel has dropped his threat to challenge in court the county's limit on property assessment increases, a move that could have threatened property tax credits for more than a half million homeowners statewide.Robert C. Schaeffer, president of the Anne Arundel Taxpayers Association, said yesterday the County Council met his demands when it dropped the property tax rate by 8 cents last week to $2.38 per $100 of assessed value.Mr. Schaeffer, author of an initiative that limits the increase in the county's property tax revenue to 4.5 percent each year or the rate of inflation, whichever is less, threatened the suit last December after the County Council adopted a 4 percent cap on annual assessment increases.

Here's an unpleasantry awaiting Maryland homeowners in 2009: Even if your home has declined in value this year - perhaps even substantially - and your local tax rates are unchanged, you may be facing a higher property tax bill. Talk about adding insult to injury. There's nothing quite like taking a heavy dose of theoretical pain (the loss of equity in your home, which you don't see until it's time to sell) with a bracing chaser of higher taxes in the here and now. For about one-third of homeowners, the bad news arrived in the mail this week with the latest round of real estate assessment notices.

We want your opinions THE ISSUE: A state survey released recently found that the average one-year assessment increase for residential properties reached nearly 27 percent in Annapolis, compared with 24 percent in other areas of Anne Arundel County, including Crofton and South County. The state reassesses properties every three years and phases the increases in over that period. Tax bills won't increase the full percentage for homeowners because state law limits assessment increases - for tax purposes - to no more than 10 percent.

The Anne Arundel County Council is considering a bill to cap increases in homeowners' property tax assessments at 10 percent.Council Chairwoman Virginia P. Clagett, D-7th, introduced the measure last night at the request of County Executive Robert R. Neall, who was inaugurated Sunday. It is the first major bill of Neall's administration.Because of the economic downtown, Neall decided not to dip below the 10 percent cap on increases that the Maryland General Assembly enacted for the state last winter.

Bowing to pressure from city homeowners, Mayor Kurt L. Schmoke today said he will introduce legislation before the City Council on Monday that would limit the increase in property assessments -- the taxable portion of a home's value -- to 4 percent a year.In making his decision, Schmoke rejected the recommendation of his Finance Department, which urged capping assessment increases at 10 percent annually, the maximum allowed under a state law passed during the 1990 General Assembly.Going with a 4 percent rather than a 10 percent cap will cost the city $2.5 million in lost revenue next fiscal year, officials said.

Tax rebels in Anne Arundel County are threatening to challenge in court the county's limit on property assessment increases, a move that could threaten tax credits for more than a half million homeowners statewide.On Monday, the County Council adopted a 4 percent cap on annual assessment increases.But Robert C. Schaeffer, leader of the county's anti-tax group, complained that the assessment cap benefits only affluent homeowners whose properties increase in value more rapidly than others. Their assessments would be held artificially low, while the assessments of more moderately priced homes would hardly be affected.

An article in yesterday's editions of The Sun incorrectly stated that Maryland law prohibits Baltimore and the 23 counties from setting a cap of less than 4 percent on real estate assessment increases. In fact, the municipalities may limit assessment increases to any level of 10 percent or less, according to the Maryland Department of Assessments and Taxation.Endorsing an election-year tax relief plan for Baltimore, Mayor Kurt L. Schmoke announced yesterday that he would support a proposal to adopt the lowest possible limit on property tax assessment increases permitted under state law.The cap, which would limit annual assessment increases to 4 percent, could cost the city as much as $2.5 million per year in lost revenue,according to the Department of Finance.

When eastern Baltimore County residents open their newly designed state property-assessment notices next month, they may be fooled into thinking their property tax bills will be higher than they actually will be.That's because the new forms include no mention of the county's self-imposed 4 percent limit on assessment increases. Rather, the notices will be based on the larger 10 percent cap on increases the General Assembly enacted for the whole state this year. Unless the residents know about Baltimore County's 4 percent ceiling independently, they'll get no notice of it until their tax bills arrive in July.

Harford's property owners will receive some minor tax relief next year, when a newly enacted credit takes effect. The Harford County Council lowered the 10 percent cap on the Homestead Tax Credit by 1 percentage point starting July 2008. The council expects to take the cap down to 8 percent by 2011. With the average property assessment rising at least 40 percent every three years, the Homestead Property Tax Credit caps the amount of property tax an owner-occupant must pay by limiting the annual increase in taxable assessments.

We want your opinions THE ISSUE: A state survey released recently found that the average one-year assessment increase for residential properties reached nearly 27 percent in Annapolis, compared with 24 percent in other areas of Anne Arundel County, including Crofton and South County. The state reassesses properties every three years and phases the increases in over that period. Tax bills won't increase the full percentage for homeowners because state law limits assessment increases - for tax purposes - to no more than 10 percent.

Even as the housing market shows signs of softening, 711,000 assessment notices being mailed today to one-third of Maryland's property owners represent the largest increase in values since the current system was devised a quarter-century ago. "It's even higher than last year," said Howard Levenson, Howard County's assessment supervisor, who had declared last year's increases the largest he'd seen in more than 30 years on the job. The average one-year increase...

State legislators are pushing for increased property tax relief for low-income homeowners - especially seniors - being buffeted by Maryland's rapidly rising home values. The state Homeowners' Tax Credit Program, designed to aid a relatively small but vulnerable percentage of the population, is assisting fewer and fewer people because it is calculated in a way that penalizes residents of houses that are appreciating steeply. A bill that passed in the House two weeks ago and is before the Senate could help several thousand people at a cost of about $1.5 million next fiscal year.

Homeowners are usually happy to find the value of their property is increasing - especially when they are looking to sell or tap its equity. But soaring home prices also bring higher tax bills, as 692,000 homeowners found out early this month when assessment notices landed in their mailboxes. The assessments, on which tax bills are based, marked the largest increases in values since 1980, when the state adopted a three-year cycle for assessing properties. Assessments for residential properties rose an average of 52.2 percent from when they were revalued three years ago. With home prices in many areas regularly posting double-digit increases over the corresponding month a year earlier, the increases were hardly a surprise, state officials said.

Rising property and income tax revenue should provide Howard County with a surplus at the end of the fiscal year June 30 that is three times higher than last year's -- but still a relatively small financial cushion, county officials said yesterday. Raymond S. Wacks, the county's budget director, told the county's Spending Affordability Committee that he estimates property taxes will produce $3.7 million more than expected, followed by $1.3 million more from income taxes and $1 million from other levies -- mainly the real estate recordation tax. Investment income, meanwhile, might decline by $200,000, he said.

The property tax assessment issue in Howard County, dormant for two weeks after the Nov. 6 election, came back to life as two separate bills were filed that would limit increases there to 5 percent a year.The County Council defeated a similar bill just eight weeks ago. But now Councilman Charles Feaga, R-5th, the sponsor of the original bill, and Chairwoman Shane Pendergrass, D-1st, who voted against it, plan to introduce separate but identical bills at the council's Dec. 3 legislative session.

The largest property assessment increase since 1990 has not yet sent Maryland property owners running to the appeals office, state officials said. They said most homeowners are knowledgeable about how much real estate values have increased during the past three years and are better able to stomach the news they received recently. State officials mailed more than 645,000 Maryland residents new home assessments in December. The statewide average increase was 36 percent for the three-year assessment.

The reassessment of home values in fast-growing southern Carroll County is another boon for a county government budget that in recent years has benefited from increases in property tax revenue. County budget officials expect property tax revenues for next year's budget to be 8 percent higher than those for the current fiscal year. They are estimating tax revenues of $113 million for the county's projected $257 million budget for next year, which would mean that the portion of the budget paid for through property taxes would go up for the third straight year.