Mayor Sheila Dixon has appointed a Blue Ribbon Committee to Study Baltimore City's Tax and Fee Structure.
Mission:
The committee is to establish recommendations for reforming the local tax and fee structure for the City to allow less dependency on property taxes and to support the City's long-term fiscal health.
Goals:
The committee will focus on the following goals for the City's tax and fee structure:
- Sufficiency: provide enough resources to fund essential services and fulfill the government's responsibilities without wide variances from year to year;
- Competitiveness: support the City's goal to promote long-term sustainable economic development and growth;
- Simplicity: provide a structure that is easy to comply with and to administer; and
- Efficiency: provide a structure that supports good economic and public policy.
Background:
Currently, the City's real property tax rate can be a disincentive for residents and businesses to invest in City property because the rate - at $2.28 per $100 of assessed value - is at least twice the rate in surrounding counties. This represents a competitive disadvantage at a time when the City is striving to build back a revenue base that has significantly diminished over recent decades. The fiscal stress resulting from a highly taxed constituency that has a relatively low tax capacity has led city leaders at times to turn to piecemeal efforts at using tax expenditures such as tax credits and exemptions to provide targeted relief or to spur investment.
In the end, however, the compounding effect of the various tax expenditures is to contribute to the overall fiscal stress and inequity in the system rather than steering the tax structure toward the goals stated herein.