Maryland Gov. Marvin Mandel announced his long-awaited property tax relief program today, proposing to tie increases in assessments on an individual's home to the average increases in assessments on all homes in the county where he lives.
If adopted, the proposal could prevent increases in assessments for many home owners, but it offers no guarantee that it would benefit home owners hard pressed by soaring property tax bills. The cost of county government is rising because of inflation, and county officials could well be forced to raise their tax rates to pay the bills. Such a move would have almost the same effect on taxpayers as increased assessments.
Mandel told reporters that his program "sounds complicated, but it's pretty simple. Each county, as a separate taxing area, will figure its rate of inflation based on the difference between on single-family, owner-occupied homes and the current year's assessments."
The figure that will result, Mandel said, is the county inflation rate for the year. Unless the county raised its tax rate, individuals whose home assessments increased by the same percentage as the overall county rate would pay no more in property taxes than they did the previous year.
Those whose home assessments increase at a faster rate would see their bills increase; those whose home assessments increase at a slower rate than the county average would have their property tax bills reduced, Mandel said.
"This gives people the benefit of the inflation rate in their counties," said Mandel.
Mandel said he met today with legislative leaders and the members of the Senate and House of Delegates committees that will consider the bill, and that their action reaction was generally good. "The one thing we've got to resolve," he said, is whether the program, if approved by the legislature, should take effect this year or next year.
Mandel said he has not yet met with county officials to test their reaction to the bill. Their reaction can be expected to be negative, since any reduction in home owner's tax bills means they will have less money in their budgets.
County officials' ability to exploit inflation in home values for revenue, rather than having to raise the property tax rate, has been a sore point for hte state officials who catch the brunt of citizen complaints.
Mandel also announced today the Lt. Gov. Blair Lee III is preparing a proposal for a constitutional amendment to allow the state to separate property, for purposes of taxation, into classes. Under current laws, residential property cannot be taxed at a rate different from that used for commercial and industrial property.