In a briefing before the House Ways and Means Committee today, the State Department of Assessments and Taxation (SDAT) offered their support for the creation of an advisory council composed of state agencies and local governments to discuss issues of mutual interest and concern, including the development of new business processes and the leveraging on new technologies. The creation of the advisory council is one of many recommendations from the 2014 Maryland Assessment Work Group (AWG), which met during the 2014 interim.
The AWG was established by SB 172, the Budget Reconciliation and Financing Act of 2014 and charged with examining the following issues:
- Whether a physical exterior inspection of each property is necessary to properly assess real property for tax purposes;
- The Department’s ability to timely and adequately maintain changes in property status that may occur throughout the year and incorporate new properties in the system of accounts;
- The extent of discrepancies in the calculation of certain tax credits and exemptions and approaches for improving accuracy; and
- The feasibility of, and any legal impediments to, contracting with a third-party vendor to perform periodic audits of the property tax credit and exemption programs for which the Department calculates the credit or exemption or of other functions for which an external evaluation may provide greater accuracy.
General AWG recommendations include the following:
- SDAT should look at new business processes in an effort to realize additional efficiency within the assessment and other administrative processes and how technology can be utilized to maximize that efficiency;
- Since local governments are major business partners with SDAT, we recommend that the legislature or Governor consider the creation of an Advisory Council. The Advisory Council would include representatives from SDAT, appropriate state agencies and local governments. In order to assure progress on the implementation of the AWG’s recommendations concerning physical exterior inspection, timely pickup, and calculation of tax credits and exemptions, the Advisory Council would meet periodically to discuss issues of mutual interest and concern, including the development of new business processes, the leveraging of new technologies, and matters specifically raised by any partner; and
- Staffing for the assessment, tax credit and exemption functions of SDAT remains a matter of importance but it must be considered in light of new technology and changes to business processes.
The recommendations for each of the four charges largely fall into three categories – business process changes, communication improvements, and increased staff.
Although the AWG found that physical inspections of property are necessary, the workgroup did not suggest changes to the process at this time.
AWG found that physical inspections are necessary on some periodic basis; that SDAT does not have the resources to ensure physical inspections of every property as required by law; and, that the lack of physical inspections does impact the accuracy of property assessments. AWG does not suggest any statutory changes at this time but recommends reconsideration after the conclusion of a technology pilot project currently underway that includes remote verifications of property characteristics.
Members of the workgroup, representing state agencies, county and municipal governments, and the public, believe the implementation of these recommendations will improve the assessment administration, enhance equity for all payers of property taxes, and provide for accurate collections for state and local governments.
The full AWG report can be found here.