Members of the Baltimore City Council pressed representatives from Mayor Brandon Scott’s office Thursday to forge ahead with plans to convene a workgroup focused on reforming the city’s property tax credit system.
Held by the newly formed Finance and Performance Committee, council members took turns defending the decision to sponsor a resolution calling for the formation of an interdepartmental work group, saying the Scott administration had not moved swiftly enough to deliver on its promises to study the issue. Members of the administration, meanwhile, said they had started looking at possible reform measures and wanted to avoid duplicating efforts with another work group.
The resolution was introduced by City Council President Nick Mosby and 10 members of the council. In a draft of the legislation, it proposes the workgroup be staffed by Mosby’s office and produce its own policy recommendations.
It also alleges that “modest reforms” to the tax credits offered by the city could lead to budget savings that could be “leveraged” for residential property owners and city residents in general. From 2010 to 2021, the cost of tax credits rose from $13.6 million to more than $62 million — which only resulted in a 5.1 percentage point difference in the city’s gross property tax revenue.
City agency heads were supportive of the council’s action, with chief equity officer Dana Moore calling it a laudable step to address past inequities. But representatives from the mayor’s office and the Department of Finance said the efforts were misguided.
“We think that work should be done under the auspices of the 10-year financial plan, and needs to be thought of in terms of the city’s long-term financial health,” City Budget Director Bob Cenname said at Thursday’s hearing. “We support the intent, but encourage the council to provide feedback into an administration-led work group.”
Cenname discussed some possible solutions — including reviewing what tax credits the city currently offers and expanding or minimizing those as needed — before agreeing to recess to give the mayor’s office opportunity to combine the two work group efforts. A representative from the mayor’s office said they would circle back to the committee in two weeks’ time.
In a written statement, City Administrator Faith Leach proposed the workgroup be staffed by budget department officials with council oversight at regularly- scheduled hearings, “as we do not want to frustrate the momentum of the process with two workgroups with duplicative missions and overlapping goals,” according to a memo from Leach’s office.
Meanwhile, council members took aim at the administration for not acting quickly enough to find solutions for the city’s high property tax structure.
Though the group was not mentioned by name, the tension stemmed from the ongoing activity of Renew Baltimore, the ballot issue committee that formed ahead of the 2022 election with the intent of adding a ballot referendum that would have cut city residents’ property taxes and slashed budget revenues on the premise that lower property taxes would attract more residents, businesses and economic activity.
With the next election cycle drawing nearer, the group — run by a coalition of former government officials, business executives, economists and academics — has launched a 2024 campaign, according to their website, and reported paying $25,000 to a political consulting firm in December 2022, according to state campaign finance records.
“If we don’t make any changes, someone else is going to make the changes for us. ... and that’s not what we want to happen,” said City Councilwoman Danielle McCray, a political ally of the mayor. “We’re not moving at the speed of urgency needed to get things done.”
“You’ve spoken the word that we all have [in mind], ‘urgency,’” said City Councilman John T. Bullock, the committee’s chair.The city’s real property tax rate currently stands at $2.248 per $100 of assessed value, the highest of any jurisdiction in Maryland. Renew Baltimore, which wanted to reduce the property tax rate by 44% over a six-year period, proposed cutting the rate starting in fiscal year 2024 by about 0.15 percentage points until it was capped at a rate of $1.25 per $100 of assessed value — still higher than adjacent jurisdictions, but more competitive in the group’s view.
At the time, the mayor and several city officials criticized the idea as half-baked and said it would cripple several quality-of-life services in Baltimore that rely on the budget. They also said the group estimated wrongly that the tax cuts would drive more people to relocate to Baltimore over time to compensate for the budget reductions, which they argued was not guaranteed.
The group’s 2024 plan, according to their website, would phase in a 46% property tax rate cut over seven years capping the rate at 1.20%.
After falling short of their petition signature goal last year, representatives from Renew Baltimore said they obtained about 9,000 signatures of the 10,000 required to put the question to voters. The group was collecting signatures for two petitions, one to amend the city charter and the other to set and cap city property tax rates.
Their backers include former mayoral candidate Mary Miller; former City Solicitor Andre M. Davis, former Baltimore City Councilman Carl Stokes; economist and Sage Policy Group CEO Anirban Basu; and Stephen J.K. Walters, chief economist of the Maryland Public Policy Institute.
In all, the group raised more than $256,000 in 2022, according to campaign finance records. One coalition member, Matthew Wyskiel, founder and president of Skill Capital Management, contributed more than $100,000, records show.
On its website, the group takes aim at the city’s current property tax rate, calling it “exorbitant,” and alleges it scares away potential investment and discourages homeowners and businesses from planting roots.
Cenname, who referred to Renew Baltimore’s campaign last year as “a really bad proposal,” said some work on reforming the property tax credit system had already begun. A two-day “brainstorming” session held earlier this month partly focused on property tax credit reform, he said, and more recommendations are forthcoming. He said a cohesive workgroup could help determine whether credits are evenly distributed throughout the city; whether some could be reduced; and how non-homeowners could benefit from the system, too.
This story has been updated to clarify that the scope of the tax workgroup and resolution only includes property tax credits but City Council members also discussed reducing the city's property tax rate.