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Franchot urges counties, city to reduce local property taxes

“As we know, the real — and this is the key issue here, I can’t emphasize this enough — the real tax burden for Marylanders is the local property tax,” says Comptroller Peter Franchot. (The Daily Record/File Photo)

Maryland’s top tax collector is calling on local and municipal governments to reduce their property taxes in the coming year.

With the close of the General Assembly session, many of the state’s 24 major political subdivisions are finalizing their respective budgets for the coming fiscal year. In part, those budgets will be funded by assessments on residential and commercial properties within their borders.

“As we know, the real — and this is the key issue here, I can’t emphasize this enough — the real tax burden for Marylanders is the local property tax,” said Franchot, speaking at Wednesday’s Board of Public Works meeting.

The comptroller said he continues to worry about the potential for a recession, calling the state’s economic situation “volatile.” A large number of residents remain unemployed as the coronavirus pandemic continues.

“It is, unfortunately, an economic burden on Marylanders’ quality of life. I hope leader of all levels of local government can take a look and figure out a way to deliver some relief in that area,” Franchot said.

At one point, Lt Gov. Boyd Rutherford could be heard siding with the comptroller.

“You’re absolutely right,” said Rutherford.

Franchot, who is seeking the Democratic nomination for governor, is making a habit of calling for tax relief. Earlier this year he spearheaded the push that led to a 30-day holiday on the state excise tax on gasoline.

On Wednesday, the three-member board approved a recommendation by the Commission on State Debt to hold the line on state property taxes.

Residential 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 approved Wednesday have not increased since 2007.

Franchot said “it’s never a good time to take money out of the pockets of homeowners” but the current economic situation is particularly bad.

“An increase would only impose disproportionate damage on our homeowners and small businesses who are feeling the impact of soaring gas prices, inflation, a higher cost of living,” he said. “We need to support them during this difficult time because as they recover financially, we all do.”

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.

State property tax revenue is dedicated to paying off state bonds.

Property taxes in Maryland’s 24 political subdivisions make up a significant portion of individual local government budgets along with a piggyback income tax.

Within those jurisdictions, smaller incorporated subdivisions may also levy a property tax assessment. Only Baltimore County and the City of Baltimore and Howard County have no incorporated subdivision taxes on top of the jurisdiction assessment.

Montgomery  and Prince George’s Counties, as examples, each have more than 30 smaller incorporated towns that also have a property tax.

In Baltimore County, the property tax rate is $1.10 per $100 of assessed value. Based on the median sale price of a home, the property tax would be about $3,300. The state assessment adds about 10%, bringing the tab to under $3,700 annually.

In Montgomery County, the local government taxes residential property at a rate of nearly 72 cents per $100 in assessed value. Takoma Park tacks on nearly 54 cents per $100 in assessed value — an increase of more than 75% over the county rate.

“I live in the People’s Republic of Takoma Park,” said Franchot. “If it moves, they tax it. I just got my tax notice, they’re raising taxes 7% in order to balance next year’s budget. That’s not a good situation for particularly seniors on a fixed income that want to stay in their homes, want to stay in Maryland.”