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PG County Executive & Council Chairman in a Pissing Match; Taxpayers Get Soaked.

Short version:

The PG County Executive, Rushern Baker, wants a double-digit property tax increase to fund schools, and is using a 2012 state law to get around the limits and requirements in the PG County Charter. The Council, led by Chairman Mel Franklin, vetoed the 15% increase, replaced it with a 4% increase, and added a penny increase to the Parks & Planning tax rate. Mr. Baker said that wasn’t good enough, vetoed the Council’s budget. The Council overrode his veto, which pissed Mr. Baker off. So he vetoed their budget again, and sent back one with an 11% increase in Property tax, and threatened legal action if the council didn’t pass his budget. The Council has once again overridden the County Executive’s budget, and passed their version.

Meanwhile, the taxpayers will see their property taxes increase, as well as their phone bills and the cost of various permits and licenses, despite very public outcry against the increases. Taxpayers are left feeling like no one is listening, and the only question now is how much will taxes increase.

 

The TL;DR version:

Back in 1978, the citizens of Prince George’s County did something absolutely brilliant.  They passed a law that capped their property tax rate at the 1979 rate, affectionately known as TRIM (Tax Reform Initiative by Marylanders).  When TRIM was challenged in 1996, the voters in this very blue county not only upheld TRIM, but also passed into law the Approval of New or Additional Taxes by Referendum, which said the county government could NOT raise any taxes without asking the public to vote on it.

People who have been involved in PG County Politics much longer than I remember the Park & Planning Surplus scheme.  Fast forward to the height of the housing bubble in about 2005/2006. Maryland has this thing called the “Homestead Tax Credit” which was very helpful to families who saw their property assessments soaring.  The Homestead Tax Credit capped the amount your property tax bill could rise each year to 10% of the previous year’s assessment.  Thing was, the PG County half of the Maryland-National Capitol Park & Planning Commission had long before decided that the Homestead Tax Credit did NOT apply to it.  So P&P was taxing people on the full assessed property values, not the Homestead Tax Credit capped values.  This resulted in a HUGE surplus of cash sitting in the PG M-NCPPC account.  Once the folks in the county government realized how much extra there was, they started lining up with their hands out and a list of projects to do.  P&P also had ideas for the money, as they had their own list of maintenance issues and whatnot that needed attention.  Everything was rolling along so well.

Then the housing bubble burst. When the county went to the state delegation for funding, the state delegates took one look at the beefy account in P&P, and said use that money to plug the holes until the economy turns around.  That right there was a violation of the taxpayer’s trust, as money that had been taken for use in parks and such was now being used to fill the holes all across the county budget. But the economy didn’t recover as fast as hoped, and the county had to keep raiding the P&P fund to fund the budget.  That is until Martin O’Malley signed a bill restricting Park & Planning to the Homestead Tax Credit assessed value levels in 2010.  After that, the money quickly dried up, and P&P was left with a HUGE list of projects, and an ever-shrinking bank account to fund everything.

In 2012, one of the constant attempts by government officials to circumvent TRIM got approved in Annapolis, under Martin O’Malley.  The State Delegation from PG County supported SB 848 2012, also known as the Education Maintenance of Effort bill. SB848 allows county governments to violate the taxing restrictions in their charters for the express purpose of “maintaining the effort” for the county school system.  “Maintenance of Effort” is defined in the bill as the level of funding from last year, and the bill makes it next to impossible to cut education spending at all.  Any reduction in education spending must be granted a waiver from the state.  Operating any large system like this and not allowing the potential for cuts leads to a situation ripe for corruption, cronyism, and abuse.  Just recently the entire school board gave up their county credit cards because of wasteful, fraudulent spending on the part of several members.

County Executive Baker has his eyes on higher office.  It’s well known to anyone who follows PG County politics that Mr. Baker wants to take a shot at the Governor’s Mansion.  According to the Washington Post, “He told residents and business leaders that rehabilitating the education system would be the centerpiece of his legacy.”  He needs to drastically improve the school system, especially since he took it over just a few years ago, in order to have something he can use in his campaign for Governor.  So SB 848 2012 is the bill that Mr. Baker is using to claim he can raise property taxes in PG County by whatever amount he deems necessary for the school system.  Mr. Baker wants to is increase school funding dramatically, and he assumes that the citizens will go along with it because “it’s for the kids.”  He started asking for a 133 million dollar increase, then tried to settle for a 65 million dollar increase. The County Council will only approve a 34 million dollar increase.  There is a group of citizens, PG Tax Watch, who want to fight any increase, claiming that SB 848 2012 doesn’t apply here, and they may be right.  However, they will face an uphill battle as the State’s Attorney General’s office has already come down on the side of the County Executive. The one thing the letter from the AG’s office does not address though, is whether SB 848 2012 can be used to increase school funding. PG County has more than enough in the budget to fund the school at last year’s level without raising taxes, therefore, neither increase is needed to meet the Maintenance of Effort.

Meanwhile, the County Council, led by Chairman Mel Franklin, have declared that simply throwing money at the school system is not going to fix the myriad of problems there.  They want to increase funding for P&P instead. It seems that P&P told the Council & Executive that they are operating in a deficit this year, but have enough in the bank to cover next year.  After that though, they will be in big trouble, financially.  Councilman Franklin is rumored to have his eyes on the County Executive job when they both term limit out in 2018.  The last thing he wants to do right now is enforce a double digit increase in the property tax.  He realizes that’s political suicide. Instead, he wants to do a much smaller increase, a 4% increase that looks completely reasonable up against Mr. Baker’s proposal of 15%. He also wants to plug that hole in P&P because one of the projects that has gotten underway is a HUGE new aquatic & recreation center near Gwynn Park High School.  It’s one of the things he promised to bring to the area, and he wants to deliver.

Baker’s original proposed budget got shot down by Franklin & Co.  He got upset and vetoed their version of the budget, and resubmitted his own again.  They overrode his veto, and sent their budget back to him.  Baker then got really upset and vetoed the Council’s budget a second time, and vaguely threatened legal action if they don’t pass his budget.  The Franklin-led council promptly overrode Baker’s veto a second time, and essential told Baker to “bring it.”  Now the county’s budget is in limbo while we all await the County Executive’s next move.






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