Tax Base

Kudos for your publication of David Tufaro's commendable piece on the challenges facing Baltimore's city government ( "A reform agenda for Baltimore's next mayor," Dec. 27). However, as in almost all discussions of the city's finances, the list was understandably silent on one basic issue: the futility of trying to significantly reduce the city's real estate taxes without addressing the difference between the tax base in the city and the counties. The city's real estate taxes are twice as high as the surrounding counties for one simple reason: The last time the city's boundaries were expanded was in 1918, drastically restricting the area that pays city real estate taxes today, and in 1948 the state constitution was amended to prohibit any annexation of additional territory without the consent of the affected residents.

Redevelopment and revitalization have emerged as key themes in the matchup between Democrat Vicki Almond and Republican Jon Herbst for the District 2 Baltimore County Council seat being vacated by Kevin Kamenetz, the Democratic nominee for county executive. To Almond, the strip malls dotted with vacant storefronts and clusters of gas stations and convenience stores in parts of the district indicate the need for comprehensive redevelopment plans, particularly for the Reisterstown Road corridor and downtown Pikesville.

In his thought-provoking March 25 column ("What's wrong with a little class warfare?") Dan Rodricks quoted a recent Economic Policy Institute report as stating that "The ratio of CEO compensation to average worker pay rose from 24:1 in 1965 to 262:1 in 2005." This rapidly swelling pay divide certainly raises some serious concerns. In the first place, pay disproportions of this magnitude may serve to undermine worker morale and motivation and thereby further America's already growing decline in world competitiveness.

The couple see it as a marriage penalty: They plan to live separately in the two homes they own, but currently only get one homestead tax credit on the house considered their primary residence. "We're a happily married couple," said Karen Smith, a Frederick lawyer, whose husband is retiring and wants to stay in their Western Maryland lakeside home. "I don't want to have to get a divorce to have the same rights as single people." Their state senator, Republican David Brinkley, is pushing legislation to remedy their situation: He wants to extend the state's homestead tax credit, but in a way so narrow that it likely would apply only to couples living separately in two homes more than 90 miles apart.

The incoming mayor, Stephanie C. Rawlings-Blake, could have a tremendous impact on improving the city's housing market by committing to lowering property taxes and pushing for a land bank authority to help the city get control of vacant homes, said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors. The city has seen its tax base erode as it struggles to compete with the declining home prices and lower tax rate of the surrounding counties, Landers said.

The incoming mayor, Stephanie C. Rawlings-Blake, could have a tremendous impact on improving the city's housing market by committing to lowering property taxes and pushing for a land bank authority to help the city get control of vacant homes, said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors. The city has seen its tax base erode as it struggles to compete with the declining home prices and lower tax rate of the surrounding counties, Landers said.

Where did millionaires go? After reading Matthew Weinstein's rebuttal ("Millionaires ready to contribute," May 15) to Laura Smitherman's article ("Top payers fade away," May 14), I have to conclude that he has missed the point entirely. To argue whether taxpayers who earn more than $1 million are vacating Maryland is a sidebar to the real issue. The fact is, we are losing revenue because of a flawed economic policy. Raising income taxes on any group of citizens at the onset of a recession, and basing revenue projections off of nonrecession years, is a fundamental misunderstanding of economics.

Despite flagging revenues and a dismal financial outlook, Maryland is moving ahead with plans to support development related to the influx of thousands of military jobs here from the base relocation and closure process. State officials have their priorities straight. In providing $5 million to help finance improvements in five newly created enterprise zones, Maryland can direct growth where it wants it, promote mass transit use and capitalize on a major federal investment. The five locations selected by the state as BRAC zones fit the objectives of smart growth: redeveloping industrial sites, building high-density areas and providing transit access.

Baltimore suffers from a difficult conjunction of financial maladies: the highest property tax rate in Maryland, the greatest concentration of poverty in the region and a big swath of tax-exempt property (fully one-third of its taxable base). The best way to lower the tax rate would be to enlarge the tax base, but unfortunately, the best way to enlarge the base is to lower the rate. It's not a vicious circle, exactly, but it's one that's very difficult to break into. What's the city to do?