ANNAPOLIS – A House subcommittee gave preliminary approval Wednesday to a resolution that recommends a 5-cent cut in the state property tax rate.
The proposal has been widely criticized as an election-year gimmick, but it counts House Speaker Casper Taylor among its 31 sponsors and was passed without discussion by the subcommittee.
House Joint Resolution 1 is not binding, it simply urges the state’s Board of Public Works to reduce the 21-cent state property tax rate to 16 cents per $100 of assessed value.
If the Board of Public Works went along with the tax cut — which is unlikely — the state would lose $60 million in revenue and the average homeowner would save about $65 on a current state property tax bill of $270.90, state analysts say.
Two of the three members of the Board of Public Works — Gov. Parris Glendening and Comptroller Louis Goldstein — oppose any plan to play with the property tax, which is used to pay off the state’s bond debt. A change could jeopardize Maryland’s AAA bond rating, said Ray Feldmann, a spokesman for Glendening.
“It’s not fair to reduce it in a election year and have to raise it again next year,” said Feldmann, noting that the tax rate has not been changed since 1981.
But Taylor, who made a rare appearance in the House office building during yesterday’s subcommittee vote, said he was pleased with the news.
“The governor should do it,” Taylor said of the plan.
The resolution passed the Taxes and Revenues Subcommittee on a 4-1 vote and now goes to the full House Ways and Means Committee for consideration.
Del. K. Bennett Bozman, D-Worcester and chairman of the subcommittee, voted for the resolution Wednesday even though he is concerned about the impact of a $60 million tax cut. He said funding for roads and school construction would disappear and he is not sure that’s what people want.
“I’m all for tax relief,” he said. “But I’ve been in this for a long time and you’ve only got so much money to spend — there’s no magic formula out there. It’s pretty tough to pick and choose what you’re going to put on the chopping block.”
Del. James Ports, R-Baltimore, also voted for the resolution, despite reservations. He said it “takes the surplus and feeds it into the property tax to use it for short-term relief.”
Ports said a better way to reduce — or eliminate — the state property tax would be for lawmakers to take a “closer look at some of the bond bills we vote on … (and) to prioritize spending when we’re talking about state debt.”
Ports said he voted for the resolution because he is in favor of tax relief. But he added that a property tax cut would leave out lower-income taxpayers who don’t own property.
The only subcommittee member to vote against the resolution was Del. Raymond Beck, R-Montgomery, who was pushing instead for an income-tax cut.
Beck is sponsoring a bill that would let taxpayers opt to donate a proposed rebate — $50 for taxpayers filing jointly and $35 for single filers — to public school construction.
But House Majority Leader John Hurson denounced Beck’s bill as fiscally imprudent, before casting his own vote in subcommittee for the property tax cut proposal.
Hurson, D-Montgomery, denied that the speaker was in the House office building to lobby the resolution, saying the two met before the subcommittee vote on other business.
Assessments and Taxation Administrator R.C. Bates said the average Maryland home was assessed at $129,000 in fiscal 1996 and the state property tax on that home was $270.90. It would be $206.40 with a 16-cent tax rate.
By contrast, Bates said, the state’s largest property owner, Baltimore Gas and Electric, would see the state property tax bill on its $4.8 billion assessment drop by more than $2 million.