City changes mind on property-tax proposal
Back in December, Baltimore's City Council asked state leaders for the ability to tax owners of uninhabitable properties at a higher rate than everyone else. Now that it's before the General Assembly, though, the proposal is attracting opposition.
From the city.
In a letter to legislators, the head of the city's office of intergovernmental relations says the administration doesn't want it after all.
"We believe that a universal application of a penalty such as [a] specific tax as proposed .... would contradict the business model employed in distressed areas by both non-profits and for-profit developers alike to acquire inventory and hold them until they possess enough properties on a specific block or neighborhood to commence redevelopment," Diane Hutchins wrote. "Our further concern is that the legislation may have negative public policy implications by harming certain property owners for situations beyond their control including owning property adjacent to City owned vacant buildings and collapsing privately held abandoned property."
A city's mayor and council don't always see eye to eye. But the twist in this case? Mayor Stephanie C. Rawlings-Blake was president of the City Council in December and -- according to the official record -- was among the 14 members voting "yea." (Council member No. 15 was absent.)
State Sen. George W. Della Jr. of Baltimore, who introduced the Senate version of the bill, said after a committee hearing Wednesday that he felt like he "got sideswiped by a hit-and-run driver."
"The Baltimore City Council sends us a resolution; they support this concept unanimously," Della said. "I introduced legislation based on all of that, plus other favorable comments from a lot of folks, not only in my legislative district but from around the city. Honestly, I believe it could be a good tool for the city to use."
When she spoke to Baltimore Sun staff in January, Rawlings-Blake listed it among her priorities in Annapolis and said the idea was "to create incentives for active homeownership." So I was curious to hear how city leaders got from "let's do it!" to "bah" two months later, but neither Hutchins nor Rawlings-Blake's spokesman returned my calls.
The Maryland Chamber of Commerce -- which also opposes the proposal -- was happy to chat about it, though.
Ron Wineholt, the chamber's vice president of government affairs, said his group's objection is largely of the "slippery slope" variety.
"The Maryland chamber has opposed all efforts by local governments in recent years to establish additional classes ofto tax," he said Wednesday after the committee hearing on the Senate bill. "Our concern is that higher taxes would be imposed on business property by local governments, and that always results in a discriminatory tax outcome. For over 80 years, state law has required counties to impose one rate of taxation on all property. We think that’s fair."
A lot of vacant properties are owned by the city, Wineholt added. "This bill would likely cause more property owners to abandon their property through tax sale, resulting in the city taking ownership," he said. "Abandoned properties are a real problem in Baltimore City, but we think the city should use the existing tools of housing code enforcement, fines and receivership to combat the problem."
The proposal was suggested by city resident Matt Gonter (here's an early post about it, before it was a council resolution), who thought Baltimore should follow D.C.'s lead. You've had some lively discussion about possible merits and downsides.
The resolution itself argues that unmaintained vacant properties "create a higher need for City services, including site cleanup and demolition, provision of legal services, police and fire protection, and legal enforcement," but generally contribute little in taxes because their uninhabitable state means low assessed values.
Della said he's not backing off from the proposal in the face of the city's U-turn. He thinks a dual tax rate is a good idea.
"This is about addressing a real problem we have here in Baltimore City," he said. "What is it, 30,000 vacant properties in Baltimore City? Some of which, granted, the city owns. But it's a huge number of properties. And the system we have in place just doesn't seem to be working to the degree where it gives these property owners the incentive to do something positive."
What especially perplexes him, he said, is why the city would decide to oppose a bill that doesn't actually set a higher rate -- just gives city leaders the right to do so.
"If they don't want to enable it, they don't have to," Della said.
Back in December, I asked what you thought of the idea. Most of the 250 people who took the poll since then have said thumbs up -- though a number of you thought any rate increase for uninhabitable properties should come with a rate decrease for everyone else.