- The Washington Times - Wednesday, April 27, 2005

ANNAPOLIS — The Maryland Board of Public Works yesterday rejected Gov. Robert L. Ehrlich Jr.’s proposal to reduce the state’s property-tax rate by 1 cent per $100 of assessed value.

The proposal by Mr. Ehrlich, a Republican, was defeated 2-1 by fellow board members Comptroller William Donald Schaefer and Treasurer Nancy K. Kopp, both Democrats.

“What the governor is doing is the right thing from the governor’s standpoint,” Mr. Schaefer said. “From my standpoint, we need the money.”

Mrs. Kopp also said the state could not afford a tax cut.

“The average homeowner [saves] about $25, which is a significant sum of money, but that is at a total cost [to the state] of about $45 million,” she said. “There are a lot of schools and hospitals that could use $45 million.”

The board instead agreed to keep the existing tax rate of 13.2 cents per $100 of assessed value. At that rate, a $300,000 house would cost a homeowner $396 a year in state property taxes.

The tax is in addition to larger tax fees levied by local governments.

Mr. Ehrlich supported the board’s decision to raise the property-tax rate 4.8 cents in 2003, when Maryland faced a deficit of more than $1 billion left by former Gov. Parris N. Glendening, a Democrat.

The increase ended the long-standing practice of using the general fund to subsidize lower property tax rates.

House Democrats this year voted to roll back the 4.8-cent increase, and Mr. Ehrlich’s budget proposal included the 1-cent decrease. However, the final budget approved by the Democrat-controlled General Assembly included no tax cuts.

Budget Secretary James C. “Chip” DiPaula Jr. said Maryland’s improved economic condition warrants a tax reduction. “In just two years, Governor Ehrlich has resolved … $4 billion of anticipated deficits,” he said.

He also said forecasts show the budget shortfall next year will be $200 million to $500 million — down from a record $1.4 billion two years ago.

Mr. Schaefer credited the governor with fixing the state’s budget mess, but said it is too soon to cut taxes.

“There is tendency when you are on the way to better times financial to cut taxes,” he said. “It is the right thing to do but it has to be at the right time.”

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