Homestead credit Q&A
So many questions came in during our live-chat Q&A about the homestead credit last week that we couldn't get to them all, but I didn't want to leave people hanging. Ditto with folks who emailed questions to Midday with Dan Rodricks at WYPR that didn't get asked on air.
So here they are, with my best effort at answers.
Two people touched on a similar theme. Margaret from Baltimore asks: "What would prevent thousands of families from fleeing the city to the counties which not only have lower tax rates but also will continue to offer the homestead cap that protects homeowners?"
And Amir from Baltimore says: "These stories are great. I'm a renter and want to find the right place to maybe buy in the city. If Baltimore residents are stripped of the Homestead credit – what incentive is there to move and live for many years?"
I don't think the homestead credit would disappear in the city and remain in the rest of the state. A successful court challenge, for instance, would undo the law statewide. I doubt the General Assembly would get rid of the program on its own -- alterations are more likely -- but there too the homestead credit would probably be dealt with on a statewide basis.
Quick reminder: The homestead program caps any increases in the amount of assessed value a homeowner is actually taxed on at 10 percent statewide, allowing jurisdictions to set their own caps lower. Baltimore's is 4 percent, like Baltimore County's. Carroll, Harford and Howard counties are at 5 percent. Anne Arundel is at 2 percent.
Some counties and cities are at 10 percent -- Annapolis, Sykesville and Montgomery County, to name a few -- but most are outside the Baltimore region. So while Baltimore could raise its cap to 10 percent, it has generally been proposed as part of a plan to decrease the city's overall property-tax rate in order to increase population. Here, for instance, is a 2007 proposal from a city blue-ribbon committee that recommends such a move.