'Slash' city property tax rate, economist says
The city's property tax rate is more than twice that of Maryland's counties. Basu argues that a guarantee of big cuts over time would get the city out of its "classic Catch-22": With its population losses, the city needs a high rate to balance its budget -- which in turn drives more residents out. He writes:
The mayor and City Council should simply make a promise to the people of Baltimore that an irreversible path of tax slashing shall be pursued. Each year, City leaders should guarantee a 2 to 4.5 percent reduction in property taxes per year. Severe penalties for failing to deliver on this promise should be established, including total forfeiture of annual compensation. The only exception would be in the wake of an act of God, for instance a Katrina-like event.
What’s remarkable about this promise is that it can be kept without too much difficulty. A credible promise of tax reduction would bring new residents and investors to Baltimore City even before the current tax rate was reduced substantially. The accompanying new tax base would under most scenarios more than offset the loss in revenues from tax rate reduction.
Do you agree?