Diving Deep into the Property Tax Efforts

| March 19, 2012 | 2 Comments

We’ve discussed property taxes already on SouthBMore.com and, trust me, it is going to be an ongoing issue here as it is throughout this city.  No one disagrees that it needs to be lowered, but what many disagree on is how drastically and how quickly.

In South Baltimore we are just a few minutes from Anne Arundel County and Baltimore County, as well as approximately 10 minutes from parts of Howard County.  Anne Arundel County boasts a tax rate of .91, Baltimore County at 1.1 and Howard County  at 1.014.  Baltimore City’s property tax is 2.268, which is more than double that of each of our surrounding counties.

With our surrounding counties so close, you can see just one reason why people may make the suburban choice. In many cases, our suburbs are also an easier commute downtown than for some of our North Baltimore neighborhoods.  As far as look and feel, I’m not sure areas like Violetville, Original Northwood, Roland Park  and Lauraville are really that much different from Catonsville, Towson and Parkville.  In many of those places their address says Baltimore, but their property tax bill does not.

Let’s bust out the calculator, which you may be learning I love to do.  So let’s buy a 300k house in all four jurisdictions as a great credit applicant with a 5% down payment and interest rate.  Here’s your monthly payment including taxes, insurance (Home and PMI) and principal in all four places:

  • $1854.94 in Baltimore County
  • $1783.44 in Howard County
  • $1757.44 in Anne Arundel County
  • $2094.94 in Baltimore City
As you can see it costs $240 less per month to live in Baltimore County, $311.50 less per month to live in Howard County and $337.50 less per month to live in Anne Arundel County.  This also doesn’t take into consideration what that money gets you –  more square footage including outdoor space, which is much more expensive in the city.  And the schools are a whole different conversation.  Bottom line, I don’t know many people that $240-337.50 per month doesn’t mean a lot to and 300k gets you something pretty nice in each jurisdiction.
So incase anyone didn’t understand the property tax burden for Baltimore residents, there is a way to look at it.  Mayor Stephanie Rawlings Blake’s plan is to take 90% of the city’s revenue from the future slots casino on Russell St. and apply it towards lowering the property tax rate.  Her goal is to gradually cut $.20 cents off the property tax rate by 2020, lowering it to 2.06 at that point.  She is introducing a bill to the Baltimore City Council tonight.
Statement from Mayor Rawlings Blake:

“Providing property tax relief for city homeowners is an important priority that will help to attract and retain families and get Baltimore growing again,” Rawlings-Blake said in a statement. “During this difficult economic period, it makes sense to target the city’s resources for property tax relief directly to homeowners first to have a bigger impact for families.

“It also makes sense to be fiscally responsible and protect funding for core services.”

Back to the calculator. That would only lower your $300k mortgage to $2044.94 in 2020 – only saving you $50 a month.  And with all of these new taxes on the state- and city-level, who knows how much more your gas mileage, energy bills, phone bills and cable/internet bills will cost you each month by then.  We do know your beer at Cross St. will be more expensive if the bottle tax is passed.

I also don’t think it’s out of the question to think that a $300k house in 2012 may be worth $380k-$400k.  Real estate is about supply and demand, and new supply is about to run out on the South Peninsula.

So while their is an effort, it’s not an effort that is going to impact our wallets in South Baltimore.  “I don’t think our tax rate needs to be the same as Anne Arundel and Baltimore County because it’s comparing apples to oranges.  There is a distinct benefit to living in city as opposed to the suburbs where you have to get in your car to do everything,” Councilman William Cole told SouthBMore.com. “Dropping our rate about 50 cents to 1.75 probably puts us in a much more competitive market and makes us a more attractive place to live.”

So why are the property tax rates so high in the first place?  “Around 1970, we were a city of nearly 1 million and now we are a city of approximately 620,000 in 2012.  We still have the same number of lane miles to cover and the same number of neighborhoods and properties to police and protect against fires.  The 30,000 to 40,000 vacant properties we have are even more expensive to police and protect against fires,” said Councilman Cole.

This also doesn’t take into account the millions of people coming through the city every week to visit, hang out, attend a game or go to work.  No offense to the surrounding counties, but they don’t offer the entertainment, tourist, graduate school or working options that the city does.  “The city has lost so many people that the burden has been disproportionally placed on a handful of people to care for the entire city,” said Councilman Cole.

Once the kings of Maryland politics, crucial mistakes were made by Baltimore many decades ago by not ever creating a commuter tax for county residents working in Baltimore or by expanding our lines into Baltimore County or joining Baltimore County.  Baltimore did not see suburban flight coming and now it’s probably too late as Baltimore County hosts a population of approximately 805,029. This is 184,268  more residents than Baltimore City.  “Baltimore County legislators and Anne Arundel County legislators are going to have to vote to allow their citizens to be taxed in Balitmore.  I just don’t see it happening,” said Councilman Cole.

So what can be done? Obviously the easy answers are growth of the city population and a casino that far exceeds expectations, which will require table games.  Based on the amount of housing units going up right now in an economy that doesn’t allow loans to unneeded housing, I do think we are about to grow, but not enough to really shake up the tax base.

The city government needs a full audit of why certain things cost as much they do. I think we would all agree that there is a lot of wasted spending.  Councilman Cole feels the elimination of take-home vehicles for non-city residents needs to stop.  “It doesn’t benefit our city in any way, but if a police car is sitting on your block, it makes the city safer,” said Councilman Cole. “We have grass-cutting services in seven different city offices. We need one office for grass cutting services to eliminate much of the beauracracy of figuring out who is in charge of all these different plots of land.  That is just one example of how we can be more efficient and effective and save us millions,” he continued.

This may be a pipe dream, but I would love to see Baltimore City become part of Baltimore County. Not uncommon for many cities around the country, including Los Angeles.  Two reasons why it will probably never happen is that Baltimore County doesn’t want the expenses of the Baltimore City and Baltimore City politicians would essentially be voting to give up some of their power.  Not sure Mayor Rawlings Blake wants to answer to Kevin Kamenetz.

So here is how you sell it.  Neither Baltimore City or Baltimore County on their own are the most powerful political entity in Maryland, but if you combine them, they certainly are.  The population of Baltimore County would be 1,425,990, by far the largest in the state.  And just imagine combining the big healthcare, financial, entertainment and tourist attractions of the city with the big universities, Federal Government agencies and big companies of Baltimore County. You are talking about a massive economic engine and the clear leader of the state of Maryland. This city would also regain a two-party political system, which every area needs to keep things fair and balanced.

I’m not waiting around for that to happen, but who knows. In the meantime we need to constantly put pressure on our politicians and leaders to make changes regarding our property taxes. This is a great city and with a competitive property tax rate, there is no lid to what our future could hold both residentially and economically!

Full Press Release from Mayor Rawlings Blake

 Councilman William Cole Discussing Property Taxes

 

Councilman Williams Cole Talking About the Future Casino

 

 

About the Author:

Founder and Publisher of SouthBmore.com, longtime resident of South Baltimore, and a graduate of Towson University. Diehard Ravens and O's fan, father of three, amateur pizza chef, skateboarder, and "bar food" foodie. Email me at Kevin@InceptMM.com and follow me on Twitter at @SoBoKevin.
Filed in: News, Real Estate
×