Maryland property taxes expected to stay flat

Marylanders will likely not see an increase on their state property taxes in the coming year.

The Commission on State Debt on Tuesday recommended no increase for the fiscal 2023 tax rate. The panel approved the rate without discussion in a roughly 5-minute meeting.

“Don’t get used to (meetings) going this quickly,” state Budget Secretary David Brinkley said to Treasurer Dereck Davis.

The meeting was the first chaired by Davis, the second Black treasurer in state history and the first to hail from Prince George’s County. The General Assembly elected him in December to fill the vacancy created by retiring longtime Treasurer Nancy Kopp.

The rate recommended Tuesday requires approval from the Board of Public Works. The three-member panel, which includes Davis, Comptroller Peter Franchot and is chaired by Gov Larry Hogan, is scheduled to meet next week.

Property owners in Maryland pay 11.2 cents per $100 of assessed value. That tax is on top of local and municipal property taxes. Public utilities pay a rate of 28 cents per $100 of assessed value.

The rates recommended by the panel have been in place since 2007.

Even so, the state expects to realize nearly $938 million in revenue. The amount represents an increase of more than 3.2% over the current fiscal year.

The money raised by the tax is used to pay back the state’s annual general obligation bond borrowing. Over the past decade, however, the revenue has not fully covered the state’s debt service.

Last year, the state needed $260 million from the general fund to help cover nearly $1.4 billion in debt payments. The amount was twice as much as the year before.

The state’s debt total payments for fiscal 2023 exceed $1.4 billion. Of that, the state will pull $430 million from general fund revenues — an increase of more than 65% compared to fiscal 2022.

“In fiscal year 2023, $430.0 million is appropriated from the general fund to support debt service assuming that the Board of Public Works maintains the current tax rate,” according to a report provided to the state panel. “Projections show increasing gaps between revenues and debt service assuming current property tax levels continue.”

The report projects that general funds totaling $264.0 million, $484.8 million, $450.7 million and $459.9 million will be required over the next four fiscal years starting in 2024.