Krebs proposes reducing cap on property tax credit By Beth Ward, Times Staff Writer Friday, February 13, 2009 ANNAPOLIS — With property values starting to level off with the most recent reassessments that were sent out at the end of last year, Del. Susan Krebs said now is the time to reduce the cap on the state’s Homestead Property Tax Credit. Krebs, R-District 9, testified in front of the House Ways and Means Committee Thursday urging the members to pass one of her bills that would lower the state’s cap on the Homestead Property Tax Credit from 10 percent to 5 percent. “I believe it’s just the right thing to do,” Krebs said. “We have a 10 percent cap on the Homestead Tax Credit, but the rate of inflation is 2 to 3 percent.” The credit caps the amount a property assessment can increase on a property owner’s tax bill each year. Most counties, including Carroll, have a cap lower than 10 percent for their Homestead Property Tax Credit. In Carroll the cap is set at 7 percent. Krebs said the legislation would only apply to the state’s credit. A lower cap would help people on a fixed income, particularly seniors, Krebs said. Two representatives from the National Active and Retired Federal Employees Association testified in support of the bill, echoing Krebs’ arguments that reducing the cap would help property owners on a fixed income. Krebs said having a lower cap allows a steadier revenue stream as assessments are phased in, which helps in budgeting and is something the counties have touted as an advantage of the cap. Members of the committee expressed concerns about reducing revenues and the state’s bond rating. Krebs said after the hearing that both of those arguments do not hold water since the money from the state’s property taxes go to pay the debt service on capital projects and would not affect the bond rating. The committee was also scheduled to hear testimony on a bill requiring annual property assessments and freezing assessments for one year Thursday. The legislation, which was introduced by Del. Tanya Shewell, R-District 5, was withdrawn prior to the hearing. Shewell said she made the decision Wednesday night after seeing the fiscal note, which analyzes the potential financial impact of legislation. “The fiscal note made [the legislation] cost prohibitive. It never would have passed,” Shewell said. “There was no way I was going to present a bill with a high fiscal note. This way I’m not wasting paper and I’m not wasting the committee’s time.” The legislation would have resulted in a $21 million decrease in revenues in fiscal year 2010 and a $15.4 million increase in expenditures, according to the fiscal note. The state currently reassesses properties every three years and any increases are phased in over the three years. Shewell said she introduced the legislation after hearing from constituents and planned to meet with the Secretary of the Maryland State Department of Assessments and Taxation to discuss the issue. “I still will be following up on their concerns,” Shewell said. For more on the General Assembly, visit the News and Notes blog at www.carrollcountytimes.com/talk. Reach staff writer Beth Ward at 410-751-5908 or beth.ward@carrollcountytimes.com. Tax credit application bill Sen. Larry Haines, R-District 5, is reintroducing legislation that would remove the requirement of Social Security numbers on applications for the Homestead Property Tax Credit. Haines said constituents approached him with concerns about providing the numbers. “People have a fear of identity left,” Haines said. “Social Security numbers have stopped being used [in other areas]. I don’t think it’s necessary.” The applications to be eligible for the tax credit are a requirement as a result of legislation from the 2007 session. A hearing on Haines’s bill is scheduled for 1 p.m. Feb. 25 in front of the Senate Budget and Taxation Committee. For more information, visit the General Assembly Web site at mlis.state.md.us/2009rs/billfile/sb0363.htm