Budget negotiators from the Maryland Senate and House of Delegates remained in a standoff yesterday over whether to grant homeowners a property tax cut in next year's budget.
The House's insistence on providing tax relief has emerged as the biggest sticking point in two bills needed to enact Maryland's nearly $26 billion budget. The House originally proposed a cut of nearly 5 cents per $100 in assessed value but offered yesterday to accept a 3-cent cut.
Sen. Ulysses Currie (D-Prince George's), chairman of the Senate Budget and Taxation Committee, said negotiators from his chamber would consider the offer over the weekend but were not prepared to budge.
"I'd love a property tax cut," said Sen. P.J. Hogan (D-Montgomery), vice chairman of the Senate budget panel. "We all would like it. We just don't feel we can afford it."
Del. Norman H. Conway (D-Wicomico) countered that lawmakers should provide relief at a time when assessments in the Washington area and other parts of the state are soaring, leading to higher tax bills.
The version of the budget passed by the House called for cutting the state property tax rate from 13.2 cents per $100 of assessed value to 8.4 cents. That would save the owner of a $400,000 home nearly $200 next year.
The revised House plan offered yesterday would take the rate down to 10.2 cents next year, saving the owner of a $400,000 home $120. The legislature would also adopt a goal of lowering the rate to 8.4 cents in future years.
That is where the rate stood before 2003, when it was raised during the first year of Gov. Robert L. Ehrlich Jr.'s term to close a budget hole.
Ehrlich's budget secretary, Chip DiPaula, said that cutting the property tax rate would probably force cuts in future years in Medicaid and other human services programs. The Board of Public Works, a panel on which Ehrlich (R) sits, could enact a 1-cent cut in the rate in May. Ehrlich's proposed budget left room for that cut.
Lawmakers had planned to work through the weekend to finish the state budget by Monday. They instead decided to break until Monday to weigh the merits of the respective chambers' positions on taxes.
"We'll look at it and talk on Monday," Currie said of the revised House proposal. "I might take it to church with me" tomorrow.