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 of real property to 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.
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Comments
Again, how do we get this mayor out of office. She is constantly impeding progress in our city. Abandon properties cost the city money in terms of city services and damage whole neighborhoods, which costs more. Why can't that landlord pay a bit extra?
Posted by: paulflinton | March 18, 2010 9:35 AM
Does the Mayor have the ability to stop the bill at this point ?
Or is her oppisition
basicly symbolic ?
Posted by: Pete from Highlandtown | March 18, 2010 10:40 AM
It seems to me that the city might be better off coming up with a program that encourages owners to do something with their positive with their properties with positive reinforcement. Tax incentives, rebates, abatements, etc. Increased taxes will only further burden the owner and possibly force a foreclosure.
Posted by: Michelle Solis | March 18, 2010 12:31 PM
Pete,
Most of the city delegation will vote according to the mayor's wishes (except for George Della and the 46th District Delegation). For county/city specific legislation, the legislature generally adheres to the wishes of the local politicians.
Posted by: MCG | March 18, 2010 1:10 PM
As a professional that deals with property tax issues for vacant buildings on a daily basis, I feel I must comment on what seems to be an overlooked reality. A large percentage - possibly even a majority - of owners of vacant buildings do not pay their property taxes and have not for many years. Owners that neglect the condition of their properties are also by and large owners that neglect to pay the taxes on them. To increase these taxes only exacerbates the problem by creating higher back taxes owed and less likelihood of these properties being able to be sold through tax sale foreclosures to more responsible owners.
Posted by: Anonymous | March 18, 2010 4:33 PM
I think it is obvious that the real estate lobby has bought this mayor. When she came out for live entertainment in B-1 and B-2 districts inside of residential neighborhoods, it was at the behest of the bar owners who fund her elections. When she pushes for a later closing time for bars it is at the behest of the bar owners. At least, unlike the last mayor, she doesn't play favorites. Anybody with the money will get her support. What is her policy position? Her philosophy for being mayor?
Her position is, support whichever cause will help her raise money. I think she is smart enough to avoid breaking the law, but she is morally bankrupt to let Senator Della to hang out to dry on this one.
Posted by: cyberfool | March 18, 2010 6:07 PM
cyberfool,
I couldn't have said it better myself. I think Stephanie will think twice before asking Senator Della for a favor in the future.
Posted by: MCG | March 18, 2010 6:39 PM
Reply to MCG
MCG, thank you for that information.
I have never written a letter to a politician before but i am planning on writing one tommorow. Although i am not naive enough to think that it will effect anyones decision.
Posted by: Pete from Highlandtown | March 18, 2010 10:50 PM
OMG, what a mess. I agree that there could be more incentives for landlords... they don't qualify for many property tax or tax credits that owner occupants do, except perhaps total rehabs. But this proposed law could encourage them to do something with the property other than let it default to the city. Why does the city let all these properties it's apparently sitting on just languish???
Posted by: lisa | March 19, 2010 3:56 AM
Get casino gaming in the city and legalize marijuana. That budget deficit will be neutral real quick (or even a surplus). No need to raise taxes when you can bring in other streams of revenue. Get the drug dealers off the street while you are it.
Posted by: Jack Daniels | March 20, 2010 12:39 PM