Right hand, meet left hand (property tax edition)
In Maryland, the state assesses property for taxation purposes, but it's the jurisdictions that do the collecting. The upside is that the people trying to determine what your property is worth are not the same people demanding you pay up.
The downside? Ditto.
Baltimore resident Bill Hopkins shared his experience of interagency frustration recently. Here's his story:
In September 2009 I went through the process of appealing my city Real Property Tax Assessment and was granted a 25% reduction…hooray!The process was convenient and fair and efficient, I thought. Bravo State of Maryland Tax Assessment Appeal Board (6 St Paul St. Suite 301).
July 1, 2010 I received my tax bill from the City of Baltimore for July 1,2010-June 30th, 2011. Guess what? No tax assessment reduction.
So I called the State office 410-767-8455 and they said…”can’t help you, it’s not our job to follow up on these matters, you’ll have to contact the city”.
So I called the phone number 410-396-3987 on the City Tax Assessment statement……….several times……..”push 6 to talk to a clerk”…….good luck with that….no one ever picks up the phone. It rings forever.
So, I get in my car and drive over to the City tax office at 200 Holiday St and wait, not too long, to speak with a very nice clerk who checked her records and said “we do not have any report from the state that your assessment has changed, we can’t do anything, you’ll have to get it straightened out with the state”
Are you kidding me?
Hopkins (no relation to me) says he then drove to the state assessment office in the city and talked to a "very nice" employee who told him she would make sure the city got his report. "Again," as she put it.
Owen C. Charles, supervisor of assessments in Baltimore, said his office certainly should follow up with the city if a property owner runs into a problem like Hopkins did. (He offered to look into Hopkins' case personally, if the homeowner wanted him to do so.)
I chatted recently with Larry Clark, director of professional development at the International Association of Assessing Officers, and it's his understanding that most jurisdictions handle both assessment and tax collection. Of course, "it's not unusual for the state revenue department to handle the valuation of something such as a railroad or a large utility that would cover several jurisdictions," he said.
Which way would you prefer -- assessments and tax collection together, or apart?
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Comments
As someone who is familiar with the lack of communication between SDAT and Baltimore City Revenue Collections, I absolutely believe that one agency should be responsible for both assessments and billings. It frustrates me to no end whenever I report a homestead credit cheat to SDAT only to find out that the credit was never revoked from the cheat's bill (even though the owner-occupancy status was changed). Someone at Baltimore City collections basically told me that they will not send a revised bill to a tax cheat until SDAT notifies them, so the city is at the mercy of a state agency.
I also believe that the current assessment and billing structure prevents the city from rebilling cheats for local tax credits which require owner-occupancy (i.e. the New Construction Tax Credit).
Posted by: Matt | July 20, 2010 8:46 AM
The primary reason for having one agency determine the assessed values and another agency collect the taxes relate to accounting practices that encourage such a separation so that corruption, fraud, and conflicts of interest are less likely. Most assessors want to distance themselves from the setting of real estate tax rates and the collection of taxes whenever possible. In my own experience, most assessment offices do not handle both assessment and tax collection. And to indicate the direction that most transparent tax systems are taking, former Soviet Union countries that wish to be considered for membership in the European Union must have a separation of these two functions.
If Bill Hopkins’ situation is not the exemption, the State needs to development and implement (or revise existing) assessment change accounting practices. With such standards the State and each jurisdiction could reconcile assessments changes that would track them from their original assessed value through any revision, including sending reports back and forth to acknowledge how assessments were changed, and when property owners were notified during each tax year.
Posted by: Richard L. Sanderson | August 5, 2010 2:21 PM
Forget the assessed value of properties altogether (and cut that entire expense from the budget) and focus instead on tax rates.
When you pay $X for a home then you can't whine if that number is used as the basis vs a KNOWN IN ADVANCE tax rate.. like say 1% per year for the first five or ten years.
As most properties will turn over within that 10 year period (for other reasons) a natural and market based COLA will settle over the problem... for nearly all residential properties in most areas.
The relatively few very long term residencies should be accommodated as they are the core of a neighborhood... and are statistically balanced by the relatively few short term residencies in any case.
(look at your own street and chew on that notion for a minute).
Posted by: MrRational | August 5, 2010 3:03 PM