On a national level, Democrats frequently bemoan the fact that Republicans promote policies that favor millionaires and billionaires rather than policies that help the middle and lower classes. Well, recently at the local level a bill sponsored by Councilmen Jones and Young did just what the national Democrats argue against; Bill 61-25 will benefit the rich in a tangible way. Entitled the “Revitalization Property Tax Credit, Bill 61-25 was passed by all of the Democrats on the Council, as well as Councilmen Marks and Crandell. Councilman Kach was absent, due to illness, and he did not vote on the bill.
This revitalization Property Tax Credit expands the ability to claim tax credits for properties within a State designated “transit-oriented development” specifically located at the Metro Centre at Owings Mills, as well as for properties within the Woodlawn Commercial Revitalization District. The County’s Auditor’s Office wrote that this bill would “incentivize the intensification, particularly in the form of additional residential units, of the State-designated transit-oriented development (at Owings Mills) and provide a kickstart for revitalization efforts … and the full build-out of Security Square Mall area.”
If any of our readers have been out to the Metro Centre at Owings Mills and the Security Square Mall area, you may be scratching your head at the use of the term “revitalization property tax credit.” The Security Square Mall vicinity does present the appearance that the area is in need of revitalization, but the Metro Centre at Owings Mills is a newer development that attractively represents the area, not a place in need of revitalization.
Before this bill was passed, the County allowed the property tax credit to continue for five years, or for ten years if the qualified improvements exceeded $10 million. Yet this law now allows for the tax credit to continue for 30 years for qualified improvements to a residential building located in either of the two areas, provided that one of two circumstances are met: first, 10% of the total number of residential units are deemed affordable( as stipulated by Dept. of Housing and Urban Development policies), or secondly, any building for senior housing, assisted living, continuing care or elderly housing that is at least sixty feet in height. The Auditor’s note also says that the tax credit would be allowed for 20 years for other qualified improvements exceeding $10 million to properties within those two geographic areas. What that really means is unclear to this writer, but if it would include improvements such as a swimming pool for residents or a renter’s clubhouse then that seems too extravagant for my taste.
The Auditor goes on to illustrate that for every $10 million of eligible property value, foregone property tax revenue would mean $110,000 annually. Imagine the tax revenue foregone if the total investment is $30 million and the credit lasts for 20 or 30 years as allowed under this new law. The foregone taxes are in the $10 million to $14 million dollar range. Depending on the length of forgiveness.
Now returning to my original comment, chances are strong that if you are building a $30 million project, you are not a member of the middle class, but rather a member of the upper class. Do the taxpayers of this County need to subsidize this type of development? My instincts tell me the taxpayers do not, and now that this bill is law, will it be expanded in the future to cover other transit-oriented development sites? Yes, this does not set a good precedent!!
Eric Rockel
President, GTCC