July 15, 2020
I am grateful to the more than 300 residents who attended the inaugural session of my District 3 Thought Series Monday evening. Thank you also to special guests Council Chair Todd Turner, Council Members Derrick Leon Davis and Deni Taveras, and Blue Ribbon Commission Chair Earl Adams and member John Tabori, who joined me for the forum. While CB-48-2020 was certainly a topic in the forum, it was also designed to be a larger discussion of our County budget and tax structure.
Please watch for more information about my August Thought Series forum on the topic of affordable housing. I hope you will attend virtually.
Below is a brief overview from Monday's Budget & Tax Structure forum. Click on any of the graphics to enlarge them.
If you've attended my annual town hall meetings or have been reading this email newsletter over the years, you've heard me talk quite a bit about my concern with our County's long-standing under investment in health and human services. This fact is especially stark during the COVID pandemic.
Since the 1990s, the County has relied primarily on outside state and federal funding for health and human services. Currently we are spending only 1.1% of our County dollars on these services.
This chart clearly demonstrates that we spend less per capita than neighboring jurisdictions. To simply reach the amount Baltimore County funds per capita, we would need to invest more than $5.6 million dollars annually. To reach the level Anne Arundel invests in health and human services per capita, we would need to invest more than $46 million annually.
The State Homestead Tax Credit is designed to help homeowners deal with significant increases in the annual assessments of their principal residence.
Perhaps the best way to understand the unique Homestead Tax Credit in Prince George's County is to look at actual assessments. These are the triennial assessments for my home, built in 1908 which my husband and I purchased in the mid-2000s.
Because the State Homestead Tax Credit is set at 10%, the State is able to use a higher assessable tax value on my home. However, Prince George's County uses a lower assessable tax value to fund County services from my family. If the County was using an assessable tax base similar to the State or even my municipality then the County could reduce the overall tax rate and still receive the same amount of funds from my home.
I encourage you to look at your triennial assessment because the effect of the Homestead Tax Credit is unequal--the effect for your home is likely different than your neighbor's or elsewhere in the County. The longer you live in your home, the more credit you realize. If you are a new homeowner you often don't receive any tax credit for a while. This means newly built homes often pay more than others. New single-family and townhouse construction helps support growth in property tax revenue for the County. This 2011 article from the Baltimore Sun elaborates on these challenges.
This slide shares more about the effect of our conservative Homestead Tax Credit cap, which for 28 years has been capped at 5% or July CPI
the year prior, whichever is lower. When CPI is at 0%, as it has been several times, the County receives exactly the same revenue in property taxes as the year prior, even as costs increase, and residents want more and improved services.
CB-48-2020 is a Charter Amendment, which if approved by the County Council, would be on the November General Election ballot for voters in
Prince George's County to vote on.
If the Council approves CB-48-2020 on July 21 and voters subsequently support it on the November General Election ballot, it does not necessarily mean taxes will be increased. In fact, it will give the County Council the flexibility to initiate any or all of the below options.
But what about money from MGM? Prince George's County has realized additional revenue from MGM. This is primarily from property taxes, hotel taxes, and resort taxes. The Council Council passed legislation in 2015 to ensure at least 50% of those revenues directly supplement education funding. Legislation from Annapolis requires that the Video Lottery Terminal Proceeds go directly to the State. Additional legislation from Annapolis actually requires some MGM proceeds to be sent to Anne Arundel County and Baltimore City in perpetuity, which is extremely frustrating.
In recent years, the County Council and County Executive have worked strategically and deliberately to increase the County's commercial tax base -- and that work was paying off before the pandemic.
I support CB-48-2020 for three main reasons:
- The ability to adjust the Homestead Tax Credit Cap will give the Council flexibility to invest more in health and human services for our residents. We could also lower the tax rate or provide targeted tax credits to veterans or seniors. The Homestead Tax Credit cap limits our ability to serve residents, especially because of its reliance on CPI.
The current Homestead Tax Credit is unequal and regressive. Some homeowners receive more of a benefit than others.
The current Prince George's County Homestead Tax Credit set to CPI is bad policy. Based on our current charter, we locked in CPI yesterday (July 2020) as the Homestead Tax Credit cap for the Fiscal Year 2022 budget year (July 1, 2021 - June 30, 2022). It is simply bad policy to set a cap based on a point in time 8 months prior to the release of the proposed budget and a year before the next budget takes effect. This is even more evident during an economic crisis when flexibility to decide the appropriate cap during the budget process is in the best interests of residents. Given the health and economic crisis in front of us, we have extremely limited ability to respond other than making dramatic cuts to services.
In the end, our Prince George's County Budget is comprised of more outside aid (state and federal) than County property and income taxes. I believe we must invest more in ourselves to truly move forward.
CB-48-2020 Public Hearing
You may sign up to testify at the CB-48-2020 Public Hearing
. (Instructions for the eComment portal can be found
.) If you simply want to watch on July 21, you can watch all live and archived County Council meetings online
As always, feel free to reach out to a member of my District 3 team or me if we can help you in any way. I am sharing updates regularly on social media, especially my
Together Strengthening Our Community,
P.S. The Census directly impacts funding for our community. Complete the 2020 Census TODAY! Call 844-330-2020, no code needed. Your community is counting on you to complete the Census 2020! #pgcensus #proudtobecounted #onlytogether