- The Washington Times - Thursday, April 20, 2006

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. yesterday won approval for an election-year cut in the state property-tax rate.

In a 2-1 vote, the state Board of Public Works approved a 2-cent reduction of the property-tax rate, to 11.2 cents per $100 of assessed value. The board consists of the governor, Comptroller William Donald Schaefer and Treasurer Nancy K. Kopp.

The tax cut will return about two-fifths of the 4.8-cent property-tax increase that Mr. Ehrlich helped pass when he took office in 2003. At the time, he faced a more than $1 billion deficit left by Gov. Parris N. Glendening, a Democrat.

Mr. Ehrlich has since presided over a budget surplus of $2 billion. Most of the surplus was spent in the state’s $29.4 billion budget that was approved this year.

Mr. Schaefer, a Democrat who opposed Mr. Ehrlich’s proposal for a similar property-tax cut last year, voted for the rate reduction yesterday. Both he and Mr. Ehrlich, a Republican, are seeking re-election this year.

Mrs. Kopp, a Democrat, voted against the cut, saying it is not prudent because of anticipated budget deficits in coming years.

She said her vote did not include campaign considerations because the state treasurer is not elected but appointed by the Democrat-controlled General Assembly.

“I don’t have to run for office,” she said.

Mr. Schaefer, who faces a spirited challenge in the Democratic primary, was expected to oppose the cut but apparently had a change of heart.

Marylanders deserve a tax break after having been “strangled to death” by higher prices for gasoline and home electricity, he said.

The governor pushed for the cut, saying the state should return money to taxpayers when it can and that rising property values will keep the revenue stream constant.

“We have a hot state,” Mr. Ehrlich said, noting military jobs headed to Maryland and the state’s low unemployment rate. “This real estate market may slow down, but it’s going to remain high.”

The rate change will reduce the annual property-tax bill for a $300,000 home by $60, from $396 to $336.

Mr. Ehrlich’s conservative base sharply criticized the 2003 property-tax increase, and the rate cut appeared to do little to blunt that criticism.

Dee Hodges, president of Maryland Taxpayers Association, a nonpartisan group advocating responsible tax policies, called the 2-cent reduction a “weak-kneed effort.”

“It’s a dumb political move in an election year,” she said. “They had plenty of excess money. … If they dropped [the tax rate] by 5 cents, I’d feel a lot better.”

Mr. Ehrlich said he supported the Maryland Taxpayers Association’s cause, but he “barely” managed to get the 2-cent cut approved. He said he needed more support in the General Assembly to get further tax cuts enacted.

“It’s a good start,” he said. “We got some tax cuts passed. We need more.”

Mr. Ehrlich said his tax-cut victories this year include an expansion of a property-tax credit program for low-income homeowners and a state income-tax exemption for the retirement benefits of military veterans.

Property-tax revenue by law must pay for the annual interest on the state’s bond debt. The reduction will not have to be subsidized by the general fund next year but will cost the state at least $37 million in 2008, the Department of Legislative Services reported.

• This article is based in part on wire service reports.

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