Property Assessment Mapping Tool Provides Wealth of County Data

A new mapping tool implemented in King County, Washington has enabled county assessors, residents, businesses and constituency groups to gain a better understanding of property assessment data and trends in the housing market.

As reported by NACo County News,

“We had a growing demand, es­pecially when the economy turned, folks would come to our office and say they wanted information about how their neighborhood was chang­ing,” said Assessor Lloyd Hara.

And serving them wasn’t as easy as just pulling up the data they wanted.

“They’d have to call us to get a complete report, and that would take about two hours to a week, depending on the complexity of the issue,” said his community outreach manager, Phillip Sit.

A seven-month development effort compiled assessment infor­mation, along with Census data, and synthesized that data into a comprehensive mapping tool, which can be used to extract data based on user-drawn boundaries.

“You can draw the shape and it pulls the data from a multitude of census tracts and does it in real time,” Sit said.

The information is useful for resi­dents, the private sector, nonprofits and even the county government. Loaded onto tablet computer, Lo­calScape can go into the field with the assessor’s office staff.

“That’s been a real advantage for our appraisers because we’re under tight budget constraints and adding another full-time employee to do data retrieval wouldn’t be possible,” Hara said.

Interested constituencies no longer need to request data from the assessment office. They can go right to the website, enter their search parameters, and access the data.

Over three years, the program will cost $230,000 for both the development and operating budget.
In Maryland, the State Department of Assessments and Taxation (SDAT) performs property assessments, not the county governments. Once assessments are complete, the county finance offices receive data files from SDAT and issues tax billings for both the state and local property tax.
In 2014, a Property Assessment Workgroup was established to examine issues related to the assessment process for real and personal property, tax credits, and tax exemptions. Recommendations for each of these areas predominantly focus on the use of new technologies to improve the assessment process and business process re-engineering to create greater operational efficiencies.  Recommendations also focus on developing better partnerships with local jurisdictions for more effective data sharing and improving communication between SDAT, local assessment offices and local governments.

Maryland Unemployment Insurance Taxes To Drop

Maryland employers will pay lower unemployment insurance taxes next year, since because fewer people are applying for unemployment benefits, and the state’s trust fund had recovered from recession-driven lows. As reported in the Washington Post:

Companies will be notified before the end of the month about the change in the tax rate, officials said. They estimate that the businesses affected will see a 50 percent reduction in unemployment insurance from $51 to $25.50 per employee per year.

The Department of Labor Licensing and Regulation press release give background to this positive change,

“The unemployment tax rate reduction is a sign of Maryland’s improving business climate that will allow employers the opportunity to thrive and create jobs as we work together to strengthen our economy,” said Secretary of the Department of Labor, Licensing and Regulation Kelly M. Schulz.

For more information, see the full story from the Washington Post and this press release from the Department of Labor, Licensing and Regulation.

Baltimore Marketing Organization Explores Imposing Hotel Tax on Short-Term Rentals

Visit Baltimore, a sales and marketing organization that works to bring conventions and tours to Baltimore City, is exploring the possibility of imposing the City’s hotel tax to short-term online rentals like those that are booked through Airbnb, an online booking service that currently does not fall under most hotel taxes.

. As reported by the Baltimore Business Journal,

Tom Noonan, the CEO of Visit Baltimore, said he couldn’t comment exactly on what a new “regulatory model” for short-term rentals would look like, but said the group wants “to ensure a safe and positive experience for guests coming into Baltimore, and, for our own community.”

“That does mean looking at those rules and regulations imposed on our hotel and bed-and-breakfast community and considering what are similarly fair and relevant standards and processes for [short-term rentals],” he said.

The City’s 9.5% hotel tax currently applies to bed and breakfasts and hotels, but does not apply to short-term rentals.

Visit Baltimore is discussing potential regulations with the city housing department’s Office of Permits & Building Inspections and the Municipal Zoning and Appeals Board, as well as the mayor’s office.

Lt. Governor Reinforces Administration’s Commitment to Restore Highway User Revenues

Lt. Governor Rutherford expressed the Administration’s continued commitment to restore local Highway User Revenues (HUR) while addressing members of the Maryland Municipal League (MML) during the organization’s annual fall conference.

As reported by The Easton Star Democrat,

During the 2015 legislative session, the Hogan administration introduced a bill that would have restored a portion of Highway User Revenues to local governments. But the General Assembly didn’t pass the legislation.

“The governor and I are committed to restoring the (Transportation Trust Fund) to its historic level, but we need your help in encouraging the legislators to take action,” Rutherford said.

In Talbot County, that encouragement has already started happening.

Last week, the county council met with local state legislators who represent the Mid-Shore — Sen. Addie Eckardt and delegates Johnny Mautz and Chris Adams — and presented their legislative priority list, including a legislative initiative of the Maryland Association of Counties to restore Highway User Revenues to counties.

The restoration of these funds is a legislative priority for MACo and MML for the upcoming General Assembly session.

Sun Has Strong Words for Proposed Baltimore County Stormwater Fee Repeal

As previously reported on Conduit Street, the Baltimore County Council recently introduced legislations to repeal the County’s stormwater remediation fee in 2017.  An October 20, 2015, Baltimore Sun editorial strongly criticized the Council’s action, arguing that the repeal would essentially shift the fiscal burden of mandatory stormwater mitigation from major polluters to average homeowners:

[The proposed repeal] would put the seven-member council, including four Democrats, on an anti-environmental path beyond such GOP-led counties as Howard and Anne Arundel. Even Carroll County, which does not charge a stormwater remediation fee, has designated a portion of its property tax revenue for that purpose.

How did this happen? Certainly, the fee is unpopular in many quarters, including the county’s east side, and Larry Hogan’s opposition to it helped get him elected governor last year. But that’s largely a result of some serious political prevarication — a representation that it’s a tax on rain (it isn’t), that it’s anti-business (not true) or that runoff isn’t a serious problem — when the reality is that it’s one of the Chesapeake Bay’s biggest environmental threats. …

Even if one abhors taxes and cares not a fig for the Chesapeake Bay, this is a short-sighted choice. For one thing, the refund will prove virtually unnoticeable (County Executive Kevin Kamenetz reduced the levy by one-third for most county residents earlier this year, and the sound of taxpayer gratitude was something less than deafening), but here’s the real problem: It means those average taxpayers, not the big polluters, will be stuck with the EPA-mandated bill. If the council were really interested in repealing this not-so-onerous fee, it would do better to reduce the property tax rate by an equivalent amount and keep billing the big polluters.

The proposed repeal is not only short-sighted, it’s effectively a transfer of tax obligation from businesses that account for much of the pollution to average homeowners who don’t. One group gets to sidestep responsibility and pocket thousands of dollars while the other gets the equivalent of a Starbucks cappuccino every other month (but still gets to foot the pollution bill in the long run). How such a decision could be worthy of support by anyone on the council, let alone every member, is absolutely baffling.

The editorial also correctly noted that if the County repeals its fee, it must create an “alternative compliance plan” to show how it will meet its state and federally mandated stormwater mitigation goals. The alternative compliance plan requirement was part of the 2015 legislation (SB863) which removed the requirement that Baltimore County and 9 other large urban counties adopt a stormwater remediation fee.

Court of Appeals Holding Reduces County Agriculture Transfer Tax Share

An October 20, 2015, Daily Record article reported that in the case of Montgomery County, Md v. Jean K. Phillips, et al, the Maryland Court of Appeals has ruled that the transfer tax counties receive from the sale of farmland must be reduced by a state surcharge of 25 percent.  Montgomery County had unsuccessfully argued that the surcharge was separate from the transfer-tax calculation and now owes a tax refund of approximately $41,000. The ruling stemmed from the condemnation of the Phillips’ farm by the Montgomery County Board of Education. From the article:

In its 5-2 decision, the high court said the General Assembly “explicitly and clearly” provided in Section 13-407 of the Tax-Property Article that the transfer tax includes the surcharge. Even without the clear statutory language, the legislature in its debates “expressed an intent” that the state surcharge be part of the transfer tax, the court added.

“The legislative history demonstrates that the state surcharge is to be collected and distributed directly to the state, and makes no mention whatsoever that the state surcharge is somehow exempt from the tax ceiling on the ‘total rate of tax under TP Section 13-407(a)(2),” Judge Shirley M. Watts wrote for the majority. “Absent any indication in the statutory language or the legislative history that the General Assembly did not intend the state surcharge to be a part of the state agricultural land transfer tax, we decline to construe the relevant statutes to reach such a strained result.” …

Diane E. Feuerherd, the Phillips family’s appellate attorney, said the family’s tax recovery “was really spelled out in the language of the statute,” which calls for inclusion of the surcharge in the transfer tax.

A key finding in both Watts’ majority opinion and the dissent by Judge Glenn T. Harrell, Jr. was MACo’s lack of objection to a 2008 amendment to the Tax-Property Article, which the Judges interpreted very differently:

[Watts] cited the Maryland Association of Counties’ failure to object to the amendment, Senate Bill 662, as evidence that local jurisdictions did not believe they would be shortchanged at tax time. Watts also said a fiscal and policy note analyzing S.B. 662 made no mention of financial harm to counties. …

But dissenting Judge Glenn T. Harrell Jr. said the fiscal note and MACo’s silence in 2008 more likely indicate a strong belief that the surcharge was not to be included in the transfer tax calculation.

“It is true certainly that the fiscal and policy note does not mention that it was expected that the change would result in diminution of the county’s revenue share, regardless of the tandem operation of the tax ceiling,” wrote Harrell, a retired judge sitting by special assignment. “My intuition and experience with state and local government over 45 years of practice (the last 24 of which were as a judge) suggests, however, that, had the result in the present case been a foreseeable consequence of the revised scheme, the note would have addressed it and Bloody Hell would have been raised by MACo and any affected constituent jurisdiction. That did not occur.”

Leslie Knapp Jr., MACo’s legal and policy counsel, said late Tuesday afternoon that the association is reviewing the high court’s decision.

The article stated that Harrell was joined by Judge Clayton Greene, Jr. in the dissent and Watts was Chief Judge Mary Ellen Barbera and Judges Lynne A. Battaglia, Sally D. Adkins, and Robert N. McDonald.

SB 662 of 2008

Baltimore County Council Unanimously Supports Stormwater Fee Repeal

An October 19, 2015, Baltimore Sun article reported that the entire Baltimore County Council has sponsored legislation to repeal the county’s stormwater remediation fee by 2017. The unanimous support also ensures an override of any potential veto by County Executive Kevin Kamenetz.

The proposed bill sets a reduced FY 2017 stormwater fee rate of $9 to $17 for residences, $9 per  equivalent residential unit (ERU) for institutions, and $31 per ERU for commercial and other non-institutional types of property. An ERU is measured as 2,000 square feet of impervious surface.  Unimproved residential property and agricultural property (other than homes) would pay $0.  The bill would then completely repeal the fee on July 1, 2017.

As previously reported on Conduit Street, Kamenetz sponsored successful legislation earlier this year that reduced the county’s fee by one-third.  The current fee rates that were set under that legislation range from $14 to $26 for residences and $46 per ERU for commercial properties.

From the Sun article:

“We all stand united in getting rid of the stormwater remediation fee,” said Council Chairwoman Cathy Bevins, a Middle River Democrat, at a news conference in Towson after the council meeting. …

Council members said the fee is a burden on homeowners and businesses. Councilman Todd Crandell, a Dundalk Republican, predicted that eliminating the fee would help spur redevelopment efforts at the former Sparrows Point steel mill. “This takes a huge burden off of that company,” he said.

A representative for Kamenetz warned that a repealing the $16 million per year fee would lead to spending cuts in other programs.

“In eliminating the fee, the council gives the administration two choices: We either institute a significant increase in property taxes or we eliminate $16 million annually in projects,” [Kamenetz spokesman Don Mohler] said.

The executive is unwilling to raise property taxes, so Mohler said some school improvements, park projects and road projects would be in jeopardy. The stormwater projects are required under the multi-state Chesapeake Bay cleanup effort overseen by the federal government.

The article also stated that council members believe the county has enough money to meet all of its needs and they cited a recent billing change to health insurance companies for ambulance rides that is expected to generate $26 million a year.

Under recently passed State legislation (SB 863 of 2015), Baltimore County is no longer required to adopt a stormwater remediation fee but if it does not have a fee, it must adopt an “alternate compliance plan” showing how it will meet its stormwater mitigation requirements.

Proposed Baltimore County Bill 85-15

Different Approaches Emerging To Improve State’s Business Climate

Maryland’s business tax and incentive structure is being closely examined this interim to improve the state’s competitiveness. However, different approaches seem to be emerging to accomplish this task.

As reported by The Daily Record (subscription required), Commerce Secretary Mike Gill, speaking at a breakfast meeting, predicted that the corporate income tax would be reduced by the General Assembly during the upcoming session.

“For those of you that have businesses, if we can get that 8.25 down to something less, and it puts a little bit more money in the business, you’ll re-invest it,” Gill said last week. “Government kind of looks at this stuff like, ‘hey, we can’t trust them, they’re probably going to go buy a new boat if we let ‘em keep that extra half a point.’ So I really do believe that there’ll be legislation put forward looking at the taxes and where we can make improvements.”

Analysts, who have examined Maryland’s tax structure, suggest changes to the personal income tax to make the state more friendly to small business.

Dan White, an economist for Moody’s Analytics, said that Maryland’s corporate tax rate may not be the problem at all.

“Corporate income taxes, especially when you combine the lowest level, are very low,” White said. “Especially when you compare them with the peer group and the USA (average).”

“Where Maryland really does stand out is that large reliance on other taxes,” White said. “Total personal income taxes — it’s the third highest burden in the U.S.”

White said that is likely to have a bigger effect on small businesses in Maryland.

“Those who are sole proprietors, people who have very small businesses, they’re not paying the corporate income tax,” White said. “They’re paying the personal income tax. So for smaller businesses and startups, sometimes that personal income tax can be just as important if not more important.”

Dan White presented these findings to the Maryland Economic Development and Business Climate Commission, otherwise known as the Augustine Commission, during a day long meeting held on October 2. The peer states identified in the report for comparison purposes included Georgia, Massachusetts, New Jersey, North Carolina, Pennsylvania and Virginia.

The report, titled “How Maryland Measures Up” indicates that Maryland has become increasingly dependent on federal jobs and has had difficulty growing its private sector employment. But, the analysis also found that Maryland’s business taxes were not excessively high when compared to a group of peer states.

The Commission is scheduled to meet again on November 30 and a final report with recommendations is expected in December.

Prior coverage of the Maryland Economic Development and Business Climate Commission can be found on Conduit Street.

St. Mary’s Weighing Cut to Energy Tax

The St. Mary’s County Commissioners are weighing the county-imposed energy tax, and considering its reduction or elimination in the context of their county’s entire fiscal picture.

From coverage in The Enterprise on the website

Both [Commissioner Mike] Hewitt and Commissioner John O’Connor (R) said they want to eliminate the local energy tax, which is 1.25 percent on electricity, fuel oil, liquefied petroleum and natural gas bills. The tax is projected to bring in $1.3 million in a $227 million county budget.

“I want to hold the line on property tax and I want to reduce the personal [business] tax,” Hewitt said, but people are asking for community centers and recreational complexes, which will take investment dollars.

O’Connor also said he wants to reduce other taxes in addition to eliminating the energy tax.

Commissioner Todd Morgan (R) had been interested in doing away with the energy tax before, but he said Wednesday that fiscal times have changed. Asked if he also supports getting rid of the energy tax, he said, “I’m a yes. I’m a no. I’ve got to be pragmatic.” However, he added, “I’m not in favor of raising taxes.”

Read the full article article online.

Moody’s Analytics: Maryland’s Business Taxes “Stack Up Well” Compared to Peers

A report prepared by Moody’s Analytics titled “How Maryland Measures Up” indicates that Maryland has become increasingly dependent on federal jobs and has had difficulty growing its private sector employment. But, the analysis also found that Maryland’s business taxes were not excessively high when compared to a group of peer states.

This report and its findings were presented to the Maryland Economic Development and Business Climate Commission, otherwise known as the Augustine Commission, during a day long meeting held on October 2. The peer states identified in the report for comparison purposes included Georgia, Massachusetts, New Jersey, North Carolina, Pennsylvania and Virginia.

As reported by The Daily Record (subscription required),

“Contrary to popular belief, Maryland stacks up very well,” said Dan White, a senior economist for Moody’s Analytics.

White said the “biggest red flag” on growing jobs and business in Maryland is the personal income tax.

“Personal income tax, the combined state and local rates, is substantially higher than almost everywhere else,” White said. “Only Washington, D.C., and Oregon are higher as a share of the local economy.”

White said the state’s personal income tax is higher than its peers and the national average.

Major report findings are listed below.

  • First, Maryland’s economy is tied to the public sector to a greater degree than any of its competitor states, even neighboring Virginia. What is more, the relatively small contingent of private sector business the state does have is often interwoven with the federal government and this tends to crowd out private enterprise from focusing more on outside demand. This inability to build or maintain businesses that rely on demand from the private sector for growth holds back the state in times of recovery, and it is similarly this dynamic at work in hollowing out the middle of the state’s labor market.
  • Second, Maryland is a high-cost state in which to both live and do business. While some of this is often more perception than reality, especially in terms of business taxes, there is still a lot of truth to this and significant improvement can be made. The state’s existing tax structure, when state and local government levies are taken into account, puts a much higher than average burden on individuals. Businesses, though less burdened by taxes than commonly perceived, are weighed down by a number of higher than average costs, most notably electricity and other utilities. High utility costs stand out most for manufacturers and other mid-wage employers as a major differentiating factor between Maryland and competing locations for production.
  • Maryland has a lot of valuable assets at its disposal, not the least of which are its high quality of life and well-educated workforce. These two assets, when coupled with the state’s access to public and nonprofit research facilities, prime the state for high-value-added spinoffs that can help expand its demand base beyond the federal budget and into the private sector. Despite these potential advantages, this type of development has been rarer than in Maryland’s competitors to date. Maryland, though relatively well-off compared with the national average, lags Virginia, New Jersey, Pennsylvania and Massachusetts in terms of venture capital deals. Worse, Maryland venture capital investment has stayed relatively flat since the end of the Great Recession while competitors like Massachusetts have seen their deal volume accelerate and total investment more than double in that time period. While still in the game nationally, this clearly demonstrates that Maryland’s competiveness with its peers is ebbing. Maryland is standing still while other states on the East Coast are pushing ahead.
  • Maryland is also home to one of the deepest and largest ports on the eastern seaboard at a time when improvements to the Panama Canal are scheduled to boost the demand for deepwater East Coast ports. Other locations in competing states have answered the call with billions of dollars in upgrades to accommodate new business while Baltimore has done very little, particularly with its ground connections, which have the potential to be a chokepoint should any substantial increase in business come Maryland’s way.

Following the briefing by Moody’s Analytics, the Commission met in executive session to begin discussing recommendations. The Commission is scheduled to meet again on November 30 and a final report with recommendations is expected in December.

Prior coverage of the Maryland Economic Development and Business Climate Commission can be found on Conduit Street.

The full Moody’s Analytics report titled “How Maryland Measures Up” can be found here.