ANNAPOLIS – Maryland lawmakers pushed for action Wednesday on legislation that would ease the property tax burden on senior citizens and low-income families, who they say are being hurt by the state’s skyrocketing real estate values.
The bills are backed by both Republicans and Democrats in the House of Delegates and elicited little opposition from the members of the Ways and Means Committee.
“The real estate boom has been great for communities all over this state, but it has left many longtime homeowners with tax bills they cannot afford,” said House speaker Michael E. Busch, D – Anne Arundel, in a written statement. “Providing relief to working families and older Marylanders is one of our top priorities this session.”
Property taxes are levied based on the assessed value of the owner’s home. When the value of the home increases, the taxes do as well, even if the owner has no intention of selling.
The two bills that have garnered the most attention, one sponsored by Gov. Robert L. Ehrlich’s administration and the other by Delegate Brian K. McHale, D – Baltimore, would increase access to state-funded property tax credits.
Currently, any homeowner whose net worth is less than $200,000 and whose home is valued at less than $150,000 is eligible for the credits. Property values have doubled since these standards were set in 1989, McHale said, and the credit program has not kept up.
Under McHale’s plan, the maximum net worth and home value limitations would increase by $100,000 each. The income levels that trigger the tax breaks would also be adjusted.
Ehrlich’s bill would increase the maximum home value to $200,000 and exclude assets like 401k accounts, pensions and IRA’s from determining a homeowner’s net worth.
McHale’s bill could cost the state $34.2 million in 2007 while extending credits to more than 9,000 additional homeowners, according to estimates by the State Department of Assessments and Taxation. Ehrlich’s could cost $16.7 million while adding almost 3,000 people to the program.
Property tax relief legislation will be very important in coming years as the baby boomers begin to retire and are forced to live on fixed incomes, said Laura A. Foussekis, of the Department of Assessments and Taxation.
“Whatever bill passes, this is huge,” she said.
McHale and Busch both said that they support the concept of the governor’s bill and expect the House of Delegates to reach common ground between the two pieces of legislation.
“The good news is that everyone is trying to address this issue,” Busch said at a press conference Wednesday. “Our ultimate goal is to have 141 votes to pass this on to the governor.”
Senior citizens, realtors and single parents also testified Wednesday in favor of the bills.
“It ensures that real relief gets to the people that need it most,” Darrin Brown, associate state director for advocacy in the AARP’s Maryland office, said of McHale’s bill. Delegates also testified in favor of other bills designed to ease property tax burdens. Two bills would restructure the homestead credit, one would exclude social security benefits in calculating gross income and another would create a commission to study the state’s tax structure.