New Tax Credit Program will provide 20 cent property tax cut by 2020 for owner-occupied residential properties.

Mayor says “20 cents by 2020 Plan” is fiscally responsible, targets City Homeowners first.

Today, Mayor Stephanie Rawlings-Blake proposed a plan to reduce Baltimore’s effective property tax rate by 20 cents by 2020 for Baltimore City homeowners. The plan will target future property tax reductions to homeowners through a newly-created homeowner’s tax credit program funded with revenue generated from the city's future slots location and by responsibly reducing City spending over several years. Under the proposal, an owner-occupied home in Baltimore assessed at $200,000 would see an annual tax reduction of $40 in 2013, growing to $400 by 2020.

“Providing property tax relief for city homeowners is an important priority that will help to attract and retain families in Baltimore,” said Mayor Rawlings-Blake. “During this difficult economic period, it makes sense to target the city’s limited 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, especially public safety.”

In order to target property tax reductions to Baltimore City homeowners, Mayor Rawlings-Blake said she will seek to create a new tax credit program that will allow the City to reduce the effective property tax rate for owner-occupied dwellings (homeowners). Mayor Rawlings-Blake plans to introduce enabling legislation during the next regular state legislative session to create the Targeted Homeowners Tax Credit Program and will submit companion legislation that defines the tax credit program to the City Council. The new program uses the same eligibility criteria as the existing Homestead Property Tax Credit Program.

Under the program, all Baltimore City homeowners who currently qualify for the Homestead Property Tax credit will qualify for the new credit. Each year, the Mayor and City Council will appropriate funds to the tax credit program by using 90% of all City revenue generated from the city's future Video Lottery Terminal location and by responsibly reducing City spending in future years.

Mayor Rawlings-Blake emphasized that fiscal responsibility is a key component of her property tax relief plan for homeowners and those other proposals to drastically cut property tax rates would cripple services, including public safety, and would likely bankrupt the City[1]. By gradually reducing the City’s property tax rate and partially relying on new revenue from slots, the City will still have to make difficult budget choices but will be able to adjust its spending plans and services in a responsible way. Mayor Rawlings-Blake said her 10-year Financial Plan Initiative will identify options for reducing the City’s structural budget deficit and creating a pro-growth tax structure.

Key Elements of Mayor’s Proposed Targeted Homeowners Tax Credit plan:

• Changing state law to enable the City to reduce the property tax rate for owner-occupied homes first.
• Dedicating 90% proceeds from the City’s future slots location to property tax relief for homeowners.
• Responsibly reducing city spending to invest in effective property tax relief for owner-occupied homeowners.
• Provides tax relief to owner-occupied homeowners who live in and maintain their properties, not for non-owner occupied properties and vacant homes owned by irresponsible speculators.
• Recognizes that reducing the property tax rate requires a long-term solution and careful planning and budgeting and although the property tax rate is a disincentive to living in the City, it is not a problem that can be solved in a few years.