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September 3, 2010

A small property tax increase in Md.

In a year when property-tax collections rose in all but a few states, Maryland had the smallest of the increases, according to a new study.

The Tax Foundation analysis, which compares fiscal 2008 with 2007, says property tax paid per capita in Maryland inched up about half a percent -- less than $10. Per-capita tax collection dropped in Michigan, South Carolina, Texas and Vermont, but increased everywhere else -- with double-digit jumps in D.C., Florida, Indiana and New Mexico. 

You'd hardly know the country was well into a severe housing slump at the time, judging by tax collection, the group says.

"Home values dropped by almost 16 percent from 2007 to 2008, yet property owners in most states paid more in 2008 than they had the year before," Kail Padgitt, one of the report's authors, said in a statement. "There are two explanations for this: First, administratively, it's relatively easy for localities to raise property tax rates to compensate for declining property values. Secondly, lagged or incorrect property assessments meant revenues continued to increase despite a drop in market value."

I'm scratching my head over Maryland's tiny reported increase, because the state's once-every-three-years assessment cycle kept assessed values from falling as quickly as the market did. And though the Homestead tax credit did cap increases for homeowners in 2008 as in all years, it still allows annual increases of at least 4 percent in most of the state.

Of course, the Tax Foundation's ranking is calculated per capita. The state gained 15,000 people between the beginning of the 2007 fiscal year and fiscal 2008. 

The foundation, which relied on Census Bureau data, shows Maryland's per-capita tax collection at $1,171, which is 29th overall. First: D.C., at $2,938.

D.C.'s rate of 85 cents per $100 in assessed value is lower than many parts of Maryland, but its home prices are higher.
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (8)
Categories: Property taxes


CRAP, people should live in baltimore city you get rapped for owning a home here. HI taxes, hi crime, hi cost of living, i wish i never bought a home in baltimore city.

Tell this to someone that pays property taxes in the city. Why bring attention to this situation, so the state legislature can justify taking more taxes out of my pocket in the next session in Annapolis. This is one piece of journaliam that doesn't need any attention.

LRC, I think political leaders are keenly aware that any increase in property taxes would make them hugely unpopular.

In any case, it's always better to know what's going on than to be in the dark, which is why I like the Tax Foundation's mission statement: "From its founding in 1937, the Tax Foundation has been grounded in the belief that the dissemination of basic information about government finance is the foundation of sound policy in a free society."

property taxes what a joke how can this be legal you keep paying over and over just another way of bleeding you try.

Jamie -

The Tax Foundation isn't the unbiased seeker of truth that their mission statement would have you believe. Although they claim to be nonpartisan, they are funded by the ultra-conservative Koch Foundation, the founders of Americans for Prosperity, and they use statistics to promote their right wing agenda.

The liberal Maryland Budget & Tax Policy Institute recently said,

The State Business Tax Climate Index measures a state’s degree of conformance with the Tax Foundation’s policy prescriptions. The Tax Foundation encourages broad taxes with low rates. It discourages progressive tax provisions that apply different tax rates to different income classes. States are penalized for reliance on progressive income taxes, or for exempting necessities (such as groceries) from the sales tax, for example.


Maryland’s low rank on this index is directly related to Maryland’s reliance on a progressive income tax. In the Tax Foundation’s weighting scheme, individual income tax-related factors account for 30.09% of the final score, even though other taxes (and particularly property taxes) are much larger shares on businesses’ overall tax bill. The Tax Foundation ranks Maryland above average on corporation taxes (14th), and sales taxes (10th).

So, Maryland’s widely-reported ranking of 45-out-of-50 is based on a narrow range of criteria which rewards tax policies favorable to businesses and high-income earners. It does not consider overall fairness, or the value to citizens and businesses of public investments financed with tax dollars.

See the full report at:

- Steve Lebowitz

Thanks for the details. Most think tanks have a particular perspective that influences everything they do, which is why I take all the "business friendly/unfriendly" rankings with many grains of salt.

If you're simply comparing property taxes by state, though, there should be less room for anything to influence the results besides the data. (I'm guessing the bigger issue here is whether this Census data survey has any shortcomings.)

It doesn't help that Bob Ehrlich raised property taxes by 58%.

Dwigt, I just double-checked on that. Ehrlich raised the state property tax rate from 8.4 cents to 13.2 cents per $100 in assessed property value in 2003.

That's a 57 percent increase in the STATE rate, but it doesn't represent the lion's share of what homeowners pay, so it's not a 57 percent increase in total property tax rates. (Baltimore County's rate, for instance, is $1.10 per $100.) Also, Ehrlich dialed back on some of that increase later in his term.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie

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