Montgomery Trims Property Tax Rate 4 Cents to Adhere to Voter-Imposed Cap

By Tim Craig
Washington Post Staff Writer
Friday, May 20, 2005

The Montgomery County Council voted yesterday to abide by a voter-imposed limit on taxes for the first time in three years, agreeing to trim 4 cents off the property tax rate while giving every homeowner a $116 tax credit.

The setting of the tax rate follows weeks of debate over the 2006 budget and gives council members a clear idea of how much they can spend during the fiscal year that begins July 1. They are scheduled to discuss the spending side of the budget today and will take a final vote next week.

Under the deal that all nine members agreed to, the owner of a $400,000 house will still pay about $104 more in property taxes next year.

But the county's property tax rate will drop to about $1.01 per $100 of assessed value, trimming away $180 that owner would have to pay had the rate been unchanged.

There will also be an automatic $116 credit on residents' 2006 property tax bills. Additional property tax credits will be offered to homeowners making less than $58,000, an idea pushed by County Executive Douglas M. Duncan (D).

"We have tried to craft a budget which is consistent with our goal of providing property tax fairness for all of our homeowners," said council President Tom Perez (D-Silver Spring).

Duncan, however, said the council's plan is full of "budget gimmicks and deferrals of expenses" that will only lead to harder decisions next year. Perez responded, "We are not doing anything Doug Duncan hasn't done in previous budgets."

Duncan's spokesman, David Weaver, said that Duncan "never knowingly deferred costs for things that we know are coming down the pike."

The council's budget is a response to homeowner frustration over record increases in property assessments.

The unrest persuaded the council to reduce Duncan's $3.6 billion budget proposal, which will likely mean cuts in the rate of growth for social service, public safety and housing programs. Even so, the county's budget for next year will be at least $150 million larger than this year's.

Yesterday, anti-tax activists, who usually feel shunned in Montgomery, claimed credit for helping to quell the council's appetite for spending. "How could I not be happy?" asked Marvin Weinman, president of the Montgomery County Taxpayers League.

To pay for the rate reduction, the council tentatively shaved about $31 million from Duncan's recommended budget. It also wants to transfer about $18 million from the capital budget, which is largely funded by bonds.

To comply with the charter amendment, the council still must identify several million dollars in additional savings or revenue to finance the plan.

The amendment, approved by the voters in 1990, limits the county to collecting property taxes equal to the previous year's total, plus inflation and the value of new construction.

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