Each of Maryland's three levels of government -- city, county and state -- should enact a homestead tax credit similar to the one the District has. Such a tax credit would provide meaningful property tax relief to homeowners and make property taxes progressive without depleting government coffers.
The concept is simple. A fixed amount of the assessed value of each owner-occupied home would be exempt from property tax. A $20,000 exemption by each of the three levels of government would mean a $271 tax break for a Rockville household. If the exemption was increased to $50,000 within two years to keep pace with climbing property tax bills, the combined annual tax break would increase to $678. This would be real money for most households.
Some might argue that such a tax credit is unnecessary because Maryland has a "circuit breaker" program aimed at reducing the tax burden for those in the lowest income brackets. Unfortunately, this program has been ineffective. Its eligibility criteria are confusing, its paperwork can be intimidating and only a few people even are aware of it. As a result, only a small fraction of those who are eligible take advantage of the program.
Others might argue that city, county and state governments cannot afford to implement property tax relief at these levels. However, with the exemption amounts contemplated here, the property tax relief provided would be less than the property tax increases that homeowners doubtless will experience.
In addition, such a homestead tax credit would apply only to owner-occupied residential properties rather than to all residential and commercial properties.
Implementing such a homestead tax credit would require a simple change to Maryland state law, because the state limits how local governments can structure and administer their property taxes, and it does not permit such an exemption now.
The enactment of a homestead tax credit would provide homeowners with the property tax relief they deserve. Equally important, property taxes would become more progressive by providing greater relief to those who need it the most. This is the right time for this measure for Rockville, Montgomery County and Maryland.
-- Larry Giammo
is the mayor of Rockville.