Property Tax Revenue Up for Counties, but State Aid May Be Cut
Maryland lawmakers, who are eyeing aid to counties as a big target for cutting the state budget, will get an extensive look this afternoon at how county coffers are faring.
According to state legislative analysts, collection of property taxes in Maryland's 23 counties and Baltimore have continued to rise -- up 6.3 percent statewide this year -- even as the actual market value of property has decreased.
The strength of property tax collections is because of a provision in Maryland law that has prevented homeowners' assessments, which are redone ever three years, from rising more than 10 percent per year. That has created a cushion between market values and assessed values that hasn't completely disappeared, allowing overall collections to continue to rise based on new assessments.
Many other sources of county revenue have taken a hit during the recession, however, including income, recordation and transfer taxes. Hotel and motel taxes and admissions taxes are holding steady after dropping in the previous fiscal year.
What this all means for the future of state aid to the counties remains unclear. Lawmakers have lopped off chunks of state aid for roads, health services and other programs in recent years, but more than 40 percent of the state budget still flows to local governments. Among other things, legislative leaders are talking about shifting at least part of teacher pension costs from the state to the counties.
The presentation regarding county revenue will be paired with an update on the state budget and the $700 million shortfall that Gov. Martin O'Malley (D) is seeking to close for the current fiscal year.
Members of the Senate Budget and Taxation Committee and House Appropriations Committee are in Annapolis for the afternoon. We'll have more on their reactions later.
-- John Wagner
Christopher Dean Hopkins
August 11, 2009; 12:00 PM ET
Categories: John Wagner , Maryland State Budget
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