Montgomery County Executive Douglas M. Duncan announced a plan yesterday to offer additional tax cuts to seniors and those living on fixed incomes, amid recent criticism that he has not offered residents broad property tax relief.
Duncan (D) said he learned of unexpected state aid and a surplus in the county's snow removal budget that he wants to use to provide $8.4 million in targeted tax cuts through an expansion of the county's homeowner tax credit program.
If approved by the County Council, the proposal would triple the number of residents eligible to apply for discounts on their property tax bills.
Currently, homeowners with incomes of up to $35,000 are eligible; Duncan wants to raise the limit to $55,000. The proposal would allow the credits to be applied on the first $300,000 of the assessed value of a home, twice the current cap.
"I feel very strongly these cuts should be targeted to those who have been hit the hardest by the state's tax increase and rising assessments," Duncan said, referring to a 5-cent increase in the state property tax rate that Gov. Robert L. Ehrlich Jr. (R) helped enact two years ago.
Although Duncan, who is widely expected to seek the Democratic nomination for governor next year, laid the blame on Ehrlich, his latest proposal is also a pitch to persuade the County Council to approve his $3.6 billion budget.
The budget proposal includes a 2-cent across-the-board property tax cut, which several council members say is far too small. A majority of council members have said they want to cut the rate by as much as 7 cents to stick to a voter-imposed tax and spending cap for the first time in four years. That would require cutting about $70 million from Duncan's budget.
But Duncan, joined by four council members and two widows concerned about their rising tax bills, tried yesterday to shift the debate by targeting additional tax relief to those they say need it the most. "We have heard these taxpayers loud and clear about the need for additional property tax relief," said Steven A. Silverman (D-At Large). "This proposal will help thousands of residents receive hundreds and hundreds of dollars in relief."
The proposal, nearly identical to one Silverman proposed last year, would provide an average tax credit of $900 to an estimated 9,400 eligible residents, said Howard A. Denis (R-Potomac-Bethesda), who endorsed the idea. In addition to Silverman and Dennis, George L. Leventhal (D-At Large) and Tom Perez (D-Silver Spring) attended the announcement.
But the council's two leading proponents for more significant property tax relief -- Phil Andrews (D-Gaithersburg) and Marilyn Praisner (D-Eastern County) -- noted that Duncan's proposal would not help 97 percent of homeowners.
"It needs to be clear this proposal would affect only 3 percent of the population, and those people have to apply for it," Andrews said. "One of the advantages of real property tax cuts is it is automatic."
Council member Michael L. Subin (D-At Large) said he plans to closely scrutinize how Duncan is proposing to pay for his targeted tax cuts.
Although five council members have indicated that they would like to stick to the charter limit on taxes, it is uncertain where they would find $70 million in budget cuts.
Yesterday, Subin, chairman of the Education Committee, recommended that $18 million, about 1.2 percent, be cut from the school system's $1.7 billion budget.
But if the council were to stick to the charter limit on taxes and spending, Subin said the council would have to cut about $40 million from the schools budget.
"There is no way they can sustain a $40 million hit without seriously jeopardizing programs," Subin said. "That would be like cutting back on food for a champion racehorse. The horse is going to die."
