Baltimore City has a new city council along with a new City Council President, and of course, a second term for Mayor Brandon Scott. Both have indicated that real property taxes are a priority — at 2.24%, Baltimore’s real property tax rate is more than double anywhere else in the state. WYPR’s Emily Hofstaedter speaks with Matt Bush a bit more on what we could expect from that over the course of the next few years.
Matt: Emily, thanks for being here.
Emily: A pleasure
Matt: You’ve spoken to a number of our city electeds about the city’s high property tax rates and what you found is that there are a few different methods on the table for tackling the problem. Tell us more.
Emily: That’s right. As we’ve reported, Mayor Brandon Scott plans to lobby the General Assembly in Annapolis so that Baltimore could be granted back a portion of its local sales tax. So when you pay tax on goods and services in Maryland it goes to the state government but Scott’s plan would have Baltimore keep one or two percent of that. He says doing so would allow him to give Baltimoreans $1000 yearly towards property tax relief, essentially. This isn’t a plan Governor Moore has signaled support of yet, and the state is looking at a major budget shortfall.
Matt: What about the city council president, newly inaugurated Zeke Cohen? Does he have a plan?
Emily: I spoke to him after the swearing-in two weeks ago and he didn’t outline anything specific but said he’d be working with state and local partners to figure something out. But some councilmembers did have ideas they wanted to explore. Matt, are you familiar with a PILOT?
Matt: A payment in lieu of taxes. Yes, those are voluntary payments that a non-taxable entity like Johns Hopkins University would pay to the city.
Emily: Exactly. Baltimore City is in a ten year-long agreement with our fourteen largest non-profits. According to the city comptroller, together they pay $6 M a year while using over $47 M a year in city services. That property would otherwise bring in $108 million in property taxes if taxable. That agreement expires in 2026 so now is really the time to be having a conversation about what’s next. Councilwoman Odette Ramos is in favor of looking at a new negotiation.
Ramos: A lot of our institutions do amazing work, but you know, half of our, almost half of our fire and police resources are going into that third of the city, and so paying their fair share for those resources is really, really going to be important.
Matt: You also spoke with Councilman Ryan Dorsey who had sort of a different way of looking at things.
Emily: Like a number of other council people, he thinks the answer is to build more housing. And in doing that, working to encourage businesses to come into more densely populated and more walk-able, transit friendly neighborhoods– which the city will also have to work to keep developing. He points out that in Baltimore or Howard counties, you may need two family cars which would cost more than the difference in yearly property taxes if you live in Baltimore and only need one or zero cars.
“It's that under production of housing that under realization of our potential to house people, that is driving up the cost of housing, and therefore driving up property assessments and therefore our tax bills.”
Matt: And all of this is to alleviate pressure on homeowners but also to hopefully get more people into the city, which has been losing population for years now. Emily, how much truth is there to this idea that people don’t want to live in Baltimore because of high property taxes?
Emily: Some truth, but it's complicated. I spoke to a few realtors who said that high property taxes along with a reputation for crime and poor city services discourage their clients from buying a city home. But one realtor reminded me that ultimately, city living is a lifestyle and the person that wants to live in Baltimore is not necessarily going to pick Lutherville or Timonium for lower taxes. But the tax bill is something that buyers balk at when they, at first, see those lower city mortgage rates. Especially in city neighborhoods that straddle the county line where homes are practically identical in size and build but vastly different in taxation.
Matt: Well, we’ll keep following. Thanks
