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General Property Tax Relief
Our system of financing governmental operations via taxes on real property is a direct decendent of tenurial obligations that date back to medevial fuedalism. Back then, nearly all wealth was in the form of land, nearly all of which was owned by the King or Queen. In exchange for the right to use and possess a parcel of land, a person agreed to provide services to the King or Queen, usually by mounting a horse, grabbing a jousting pole and going off to fight the enemy of the day. In the absence of a war, a percentage of the crops produced by the land were given to the government. This system later evolved into the payment of money to satisfy one's obligations arising out of the use and possession of land. Still later, it became possible for a person to become the outright owner of the land but the obligation to pay monies to the government remained in place. In general, the system we have today obligates everyone who owns real property to pay the county government one percent (1%) of the value of his or her property each year.
There are several problems with this system:
- real property no longer represents the bulk of the wealth of society;
- many forms of real property, such as residences, are an expense to the occupant rather than an income producing asset;
- ownership of real property no longer implies an ability to pay skyrocketing property taxes; and
- there is usually no relationship between the amount of property taxes you pay and the amount of government services you consume.
We have become over dependent on taxation of real property to finance the operations of government. We need to gradually wean ourselves off of this dependency. I favor:
- Holding the tax rate at the "constant yield rate," which is the rate that will bring in the same amount of property tax revenue as the previous year. This compensates for increases in the assessed value of real property and prevents back-door tax increases.
- A gradual movement toward "fees for services" rather than "free services." While the Maryland Constitution requires us to provide a free public education for our children, few other government services must be provided free of charge. We need to start asking the consumers of those services to pay a portion of the cost to provide the service rather than having the entire burden fall on the general taxpayer. For example, we spend a great deal of money building and maintaining interior roads and parking facilities in our county parks. I see nothing wrong with asking motorists who enter the park to pay a fee that represents some (not all) of the costs to provide these amentities.
- Getting spending under control. The current board of county commissioners took office in 1998 as the beneficiaries of a $12 million operating budget surplus. If present trends continue, we will saddle our successors with a $15 million deficit for the fiscal year beginning July 1, 2003 and a cummulative deficit over the next six fiscal years of $155 million. We need to reverse this trend. The only way we can do so is to begin saying "no" to the pressure groups who favor more spending than we can afford.
