2008 Woodie Awards
Baltimore's financial woes could necessitate a tax hike
Mike Calabrese
Issue date: 2/19/08 Section: News
In Baltimore, city officials are under renewed pressure to reduce property taxes to attract and retain residents and businesses.??
Elected leaders like Baltimore's Mayor Sheila Dixon are running up against a fundamental problem. People hate new taxes, but they remain the most viable way to fund local government.
Replacing a significant portion of the revenue generated by the property tax would require substantial increases in other taxes. Slashing spending enough to allow a large reduction in the property tax would have a major impact on police, public works and other local government services.
The issue's complexity was illustrated by the report released by Dixon's adminstration on property taxes. If property taxes were to remain at their current rate money would have to be raised elsewhere. Possibilities include weakening popular tax credits, imposing a local sales tax, and relying more heavily on the $46 million a year in gambling revenue. The removal of popular tax credits, however, may have an adverse effect on low-income families in the city.
Property tax revenue also grows more consistently than other taxes, making it easier for government officials to estimate how much they can spend. In Maryland and many other states, it is tied to a home's market value so if tax bills rise it's ostensibly because the home is worth more. And the tax pays for services that are tied to property, such as police and fire protection and garbage collection.
One of the problems the Dixon administration faces is that Baltimore's property tax rates are by far the highest in the state as it stands today. The city taxes are more than double Baltimore County's. That has forced many homeowners out of the city, which consequently drives businesses out the area as well. Low-income families may be hit the hardest from tax increases, as the annual cost of living rises in east coast cities yearly.
Though property taxes may be the most direct way to pay for public services, they can harm individuals on fixed incomes if home values suddenly spike. Citizens also complain about the city's expenditures. Keith Losoya, a community liaison for the Baltimore Tax and Education Action group, writes on his blog that he believes the city is misallocating funds.
Elected leaders like Baltimore's Mayor Sheila Dixon are running up against a fundamental problem. People hate new taxes, but they remain the most viable way to fund local government.
Replacing a significant portion of the revenue generated by the property tax would require substantial increases in other taxes. Slashing spending enough to allow a large reduction in the property tax would have a major impact on police, public works and other local government services.
The issue's complexity was illustrated by the report released by Dixon's adminstration on property taxes. If property taxes were to remain at their current rate money would have to be raised elsewhere. Possibilities include weakening popular tax credits, imposing a local sales tax, and relying more heavily on the $46 million a year in gambling revenue. The removal of popular tax credits, however, may have an adverse effect on low-income families in the city.
Property tax revenue also grows more consistently than other taxes, making it easier for government officials to estimate how much they can spend. In Maryland and many other states, it is tied to a home's market value so if tax bills rise it's ostensibly because the home is worth more. And the tax pays for services that are tied to property, such as police and fire protection and garbage collection.
One of the problems the Dixon administration faces is that Baltimore's property tax rates are by far the highest in the state as it stands today. The city taxes are more than double Baltimore County's. That has forced many homeowners out of the city, which consequently drives businesses out the area as well. Low-income families may be hit the hardest from tax increases, as the annual cost of living rises in east coast cities yearly.
Though property taxes may be the most direct way to pay for public services, they can harm individuals on fixed incomes if home values suddenly spike. Citizens also complain about the city's expenditures. Keith Losoya, a community liaison for the Baltimore Tax and Education Action group, writes on his blog that he believes the city is misallocating funds.
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