Tax Relief

Back in the early 1990s, Baltimore leaders set a long-term goal: to have the city's property tax rate be no more than 150 percent that of Baltimore County. I was reminded of that goal last week, when Mayor Sheila Dixon announced a task force to recommend property tax relief, as many residents are reeling from soaring assessments. The city, of course, has never come close to reaching its goal. Although the numbers and calculations have changed (rates are now based on 100 percent of assessed value, as opposed to 40 percent 15 years ago)

When he mails off his ever-rising annual property tax payment, Ben Pritchett includes a letter. Addressed to no one in particular, the letter states: "If you keep this up, pretty soon you will be taking care of me." The 72-year-old retired Bethlehem Steel worker has seen no rise in his pension, a decrease in what his former employer pays for his health care insurance and an increase in the assessment of his Bel Air condominium. "We all need tax relief," he said, scanning a roomful of residents who came to the McFaul Senior Center in Bel Air last week to gather information on the county's newly enacted Homeowners Property Tax Credit law. "How poor do we have to get before we get it?"

A task force appointed by the county to examine tax breaks for senior citizens may expand its work to include other segments in need of relief. "There is a consensus among the [County] Council that the scope of our investigation should be broadened," Ted L. Meyerson, chairman of the task force, told the group Thursday. He characterized the prospect as a "high probability." The needs of renters and the disabled are the sectors most likely to be examined, although Meyerson said that the council might wish to include the "general poor," as well.

GOP's tax cuts can save us money, won't hurt retireesI feel compelled to respond to The Sun's editorial "Alan Greenspan vs. the Republicans" for three reasons.First, it is important to note that The Sun took Federal Reserve Chairman Alan Greenspan's statement out of context.Mr. Greenspan's remarks on the Republican tax relief bill were: "My first priority, if I were given such a priority, is to let the surpluses run, as I've said before. My second priority is if you find that as a consequence of those surpluses they tend to be spent, then I would be more in the camp of cutting taxes, because the least desirable (outcome)

Don't squander surplus on reckless spending programsBudget analysts are now projecting that Maryland will experience a $619 million budget surplus for our current fiscal year ("State surplus seen as sizable," Oct. 13).The state also will also have accrued $576 million in its rainy day reserve fund by the end of the fiscal year and expects its first payment of $188 million from the the national tobacco settlement by the end of the year.Potential uses for this revenue will be a top priority when the Maryland General Assembly reconvenes in January.

WASHINGTON -- President Clinton carried out his long-promised veto of the Republicans' $792 billion tax cut proposal yesterday, rejecting it as "too big, too bloated" and "too great a burden on America's economy," even as he invited Congress to cooperate on a grand economic compromise."

WITH the congressional season rapidly drawing to a close, thousands of American homeowners are in line to benefit financially from two little-noticed tax developments on Capitol Hill.One involves the surprise rebirth of a reform designed to provide tax relief for certain homeowners who sell their property at a loss. The other involves the retention in the tax code of one of the most generous provisions for owners of primary residences and vacation property -- a rare federal sanction to pocket ordinary income with zero taxation.

Two top Maryland legislators are proposing a $44 million annual tax break for the state's power companies that would be linked to deregulation of utilities. The state government, counties and rate-payers would share the burden of the tax cut.The legislation, which is expected to be introduced in the General Assembly today, would cost Baltimore City and the nine counties with power plants nearly $15 million a year, according to an analysis prepared by legislative staff members. Anne Arundel and Calvert counties would be hit the hardest.

WASHINGTON -- Congressional Republicans scrambled yesterday to ensure speedy approval in the House and Senate -- perhaps as soon as today -- of their $792 billion tax plan. At the same time, President Clinton reiterated his vow to veto it.In the final version of the compromise crafted by Republican House and Senate negotiators, the timing of the income tax-rate cuts was adjusted to give the earliest breaks to those at the bottom of the income scale.Taxpayers in the lowest tax bracket -- 15 percent -- would see a cut to 14.5 percent in 2001 and to 14 percent in 2003.

ROCKVILLE -- The Montgomery County Council, often accused of being dominated by tax-and-spend liberals, did a little less of both in approving a $2.6 billion budget for fiscal year 2000.The council gave County Executive Douglas Duncan almost all the money he asked for in March, but trimmed $2.6 million from his proposed spending plan. It also passed along to taxpayers a series of small cuts totaling $7 million in the first year, and increasing to $24 million after three years.The fiscal spending plan is 7 percent above the current year, but 1 percent below a spending cap the council set last month.

Despite estimates that more residents might apply for Howard County's property tax credit for seniors, at greater cost to the county treasury, the number of applications seems in line with prior years, finance officials said. Through Sept. 14, the county had received 1,051 applications, compared with 1,175 for all of fiscal 2009. Last year, the program cost the county $447,300, compared with $371,838 so far this fiscal year. That does not count 168 homeowners eligible for a credit whose applications are awaiting review by state tax authorities.

The ka-ching of slots had only one appeal to Mayor Sheila Dixon - the possibility of lowering Baltimore's chart-topping property tax rate. The city took another step toward realizing the mayor's goal by concluding a profit-sharing lease agreement with the group that has proposed building a slots casino in south Baltimore. City residents sure could use a break on their property taxes; the city's rate is the highest in the state. But any cut in the rate will depend on the success of slots.

The Dixon administration and the group bidding to build a slots parlor in Baltimore have reached an agreement that could generate enough money to slash Baltimore's property tax rate by up to eight cents, officials said. "It looks like this process is going to move forward," said Mayor Sheila Dixon. "The goal was to try to reduce property tax. I know that we've got to do our best to get some [property tax] relief." If all goes as planned, the reduction in the property tax rate - now $2.268 per $100 of assessed value, by far the highest rate in the state - would be the largest single cut in recent memory.

Victims of New York financier-swindler Bernard L. Madoff will get tax relief from Uncle Sam, but not as much as some had hoped. The Internal Revenue Service issued guidelines yesterday that will help many of the 4,800 victims of Madoff's $65 billion investment fraud recoup some losses by seeking repayment of up to five years of past taxes. "Beyond the toll in human suffering - as entire life savings and retirements appear to have been wiped out - the Madoff case raises numerous tax and pension implications for the victims," IRS Commissioner Doug Shulman told the Senate Finance Committee.

The Obama economic team's announcement this week that it wants more tax relief for small businesses is good news for the economy. Small business today is larger than big business - it earns more money and employs more people - and while Wall Street bailouts may be necessary to preserve capital and liquidity, they are also likely to raise the long-term tax burden of Main Street. If this happens, we will be hurting the very businesses that we need to pull us out of the recession. The predominance of small business in the American economy didn't happen by accident.

The people Rep. Elijah E. Cummings heard from, and there were many, wanted to know one thing - how would the $700 billion financial rescue plan help them? The neighbor in West Baltimore had a mortgage he no longer could afford. Retirees despaired over their dwindling savings. A businessman was worried he might have to lay off workers. Mr. Cummings sympathized with all of them, but as he reluctantly cast his vote for the government bailout package last week, he knew too many of his constituents would still be left struggling.

More than 650 older Howard County homeowners received a collective $380,000 discount on their local property tax bills so far this fiscal year, but several members of a residents committee looking at the program think that is not enough relief. Under the two-year-old Senior Tax Credit Law, people ages 70 or older who own their homes, have household incomes under $70,000 and assets of less than $500,000, excluding their homes and retirement accounts, are entitled to a 25 percent reduction in property taxes.

The giant federal housing and foreclosure relief legislation now heading for enactment contains a little-noticed - but potentially far-reaching - change in real estate tax policy. It would permit millions of homeowners who do not itemize on their federal tax filings to claim a deduction for at least a portion of their local and state property taxes. Though the House version of the bill set the maximum write-off at $350 a year for single taxpayers and $700 for married joint filers, the Senate's more generous $500 and $1,000 deductions were expected to prevail in the final compromise version.

People sitting comfortably at home in Baltimore, paying their mortgages monthly, may feel no connection to the subprime mortgage crisis. But it just cost them a cut in the property tax rate. Faced with budget shortfalls, Mayor Sheila Dixon has decided against shaving 2 cents off the rate of $2.268 per $100 of assessed value as part of the five-year plan to lower the rate by 10 cents. But the mayor made the wrong choice: She should have withheld cost-of-living raises for city workers and delivered some tax relief.

Blaming a weak economy and shaky revenues, Mayor Sheila Dixon is abandoning a long-standing plan to cut 2 cents this year from Baltimore's highest-in-the-state property tax rate. The annual cut - which has been made each of the past three years - was supposed to knock 10 cents off the tax rate over a five-year period. The reductions have become a primary means to provide tax relief to city property owners. Baltimore's property tax rate is by far the highest in Maryland - more than twice Baltimore County's - and a broad spectrum of city officials have acknowledged that the tax may be stifling growth and threatening homeowners on fixed incomes.