In two separate rulings this week, the Supreme Court of Maryland blocked a proposed property tax cap and a “Baby Bonus” program from appearing before Baltimore City voters as charter amendments in the upcoming election.
Proposed Property Tax Cap
Renew Baltimore, a group backed by commercial developers and real estate companies, proposed a charter amendment to dramatically reduce Baltimore City’s real property tax rate over seven years. The proposal would have lowered the current tax rate of $2.248 per $100 of assessed property value to a capped rate of $1.20 per $100 by fiscal 2033.
According to an analysis by the Baltimore City Department of Finance, the proposal to reduce the City’s real property tax rate from $2.248 to $1.20 per $100 of assessed value over seven years would create a devastating budget shortfall.
Due to the loss of property tax revenue, the City faced a potential annual budget gap of $891 million by fiscal 2034. This deficit would require drastic service cuts that disproportionately affect the City’s most vulnerable residents.
In Benedict J. Frederick, III, et al. v. Baltimore City Board of Elections et al., the Supreme Court affirmed the Circuit Court’s ruling, which blocked the proposed charter amendment from appearing on the ballot.
The Court found that this proposal conflicted with Maryland’s Tax Property Article, which outlines specific guidelines for property tax rates across the state. State law mandates that the authority to establish specified property tax rates in counties and Baltimore City rests exclusively with the county or city council.
The “Baby Bonus” Proposal
The Supreme Court of Maryland also ruled against including the “baby bonus” proposal on the ballot. This proposal aimed to amend the City’s charter to grant $1,000 to new parents to support families and reduce poverty. Organizers of the campaign estimated the program would cost the City $7 million per year.
The Supreme Court, however, found the amendment unconstitutional. In Baltimore City Board of Elections et al. v. Mayor and City Council of Baltimore et al., The justices agreed with the Circuit Court’s earlier decision that the proposal overstepped the Baltimore City Council’s legislative authority. The Court noted that while voters have the right to make policy decisions, the specific implementation details must remain within the legislative framework, a requirement the Baby Bonus proposal did not meet.
Stay tuned to Conduit Street for more information.
