Message from Chair Turner
Welcome to a Special Edition of the 4th District Legislative Email Newsletter. This Email Newsletter provides information on Council Bill CB-48-2020, a proposed Charter Amendment on the County’s Homestead Property Tax Credit Cap that may be placed on the November 2020 General Election ballot for voters in the County.
First, I think it is important to share with you background information, the history of the Homestead Property Tax Credit Cap and information on recent County efforts to address our fiscal situation. Second, it is also important that you understand the Charter Amendment process and what CB-48-2020 is and is not. Lastly, to explain the context that the County is in as we start a conversation to address larger issues currently facing us.
Upcoming Virtual Public Forum
Monday July 13th - 7:00pm
I will be joining my Council colleague Dannielle Glaros (District 3), along with Council Members Deni Taveras (District 2), and Derrick L. Davis (District 6), to discuss the County’s tax structure, CB-48-2020 and the Blue Ribbon Commission report (see below). Please see the flyer for registration information for the virtual forum or click here. I hope you will join us for this important discussion.
State Homestead Property Tax Credit
The Homestead Property Tax Credit is a State enacted program (Section 9-105 of the Tax-Property Article of the Annotated Code of Maryland) which spreads out over a three-year process the implementation of the real property tax for any increase in the assessed value of one’s primary residence.
The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year. For a property owner to be eligible to receive the credit, the property owner must have owned the property for at least one year, it must be their principal residence, and they must submit a one-time application. Under State law, every property (residential and commercial) is assessed every three (3) years based on market value, construction costs and/or other information.
Here is an example of this process:
Assume that your home’s old assessment was $100,000 and your new phased-in assessment for the first year is $120,000. State law provides for an assessment cap of 10% which would then limit your taxable assessment to $110,000. The difference in property taxes based on the uncapped assessment of $120,000 and capped assessment of $110,000 would be $100, at a property tax rate of $1.00 per $100 of assessment.
This table shows the most recent Homestead Assessment Caps for all Maryland Counties and Baltimore City (including the County’s approved percentage FY 2021 that began July 1st):
 This table shows the most recent Homestead Assessment Caps for Large Municipalities in Maryland (population > than 5,000), including those in Prince George’s (including the cities of Bowie and Greenbelt which I represent):
Cap History In Prince George’s County
In 1992, the residents of the County, through a voter approved referendum question, imposed the current County Homestead Property Tax Credit Cap in the County Charter Section 812 (d):
“In accordance with the provisions of Section 9-105 of the Tax-Property Article of the Annotated Code of Maryland, on or before January 1 of each year, the County Council shall set, by law, the homestead credit percentage for the taxable year beginning the following July 1. The homestead credit percentage shall be no greater than 100% plus the percentage of increase in the Consumer Price Index for the previous twelve months, rounded to the nearest whole number, but not more than 105%.”
Prince George’s has operated under this Cap for over 28 years which has had a financial impact on both our residents and the County. For a listing of the Cap amounts since the County Cap was imposed, click this link. Please note that the County has only hit the 105% Cap twice in almost 30 years because of the CPI requirement.
This Table shows the impact of the self-imposed 5% or CPI Cap over the past ten (10) County Fiscal Years:
CB-48-2020 – Proposed Charter Amendment
CB-48-2020 is NOT a tax increase, it is a proposed Charter Amendment that would be decided by Prince George’s County voters in the November General Election. In addition, CB-48-2020 does not impact TRIM (Tax Reform Initiative by Marylanders) the property tax restrictions adopted in the 1970s in the County.
CB-48-2020, as proposed by Council Member Derrick L. Davis, would ask County voters to consider whether to change the County’s Charter Section 812. It would ask the following question in November:
“In accordance with the provisions of Section 9-105 of the Tax-Property Article of the Annotated Code of Maryland, on or before [January 1] March 15 of each year, the County Council shall set, by law, the homestead credit percentage for the taxable year beginning the following July 1. The homestead credit percentage shall be no [greater] less than 100% [plus the percentage of increase in the Consumer Price Index for the previous twelve months, rounded to the nearest whole number, but not more than 105%.] or exceed 110% for any taxable year; and shall be expressed in increments of 1 percentage point.”
Therefore CB-48-2020 would do two things: (1) change the date by which the County would set the homestead credit percentage from January to March (as now required by State law) and (2) remove the Consumer Price Index (CPI) requirement and the 105% Cap.
If adopted (ratified) in the November General Election, this would put Prince George’s County in the same position as almost every other County and municipal government in the State of Maryland. This process would allow the County Executive and Council, as part of our annual budget review public process, to determine the percentage of the homestead tax credit without artificial restrictions and gives your elected officials the discretion. It would not require a change in the homestead tax credit percentage nor would it require the County to increase it.
Charter Amendment Process
Section 1105 of the County Charter sets for the procedure and timing for a Charter Amendment question to be placed on the ballot for consideration. Section 1105. - Charter Amendment states:
“Amendments to this Charter may be proposed by an act of the Council approved by not less than two-thirds of the members of the full Council, and such action shall be exempt from executive veto. Amendments may also be proposed by petition filed with the County Executive and signed by 10,000 registered voters of the County. When so proposed, whether by act of the Council or by petition, the question shall be submitted to the voters of the County at the next general election occurring after the passage of said act or the filing of said petition; and if at said election the majority of votes cast on the question shall be in favor of the proposed amendment, such amendment shall stand adopted from and after the thirtieth day following said election. Any amendments to this Charter, proposed in the manner aforesaid, shall be published by the County Executive in the County newspapers of record and in media for public notice as defined in Section 1008 of this Charter for five successive weeks prior to the election at which the question shall be considered by the voters of the County.”
In order to meet the Charter and State law certification requirements, as well as the Council legislative calendar, any Council Charter Amendment would have to be introduced by the end of June, subject to a Public Hearing and enacted by the end of July. In this case, CB-48-2020 was presented on June 23rd, heard in our Committee of the Whole and favorably recommended by a vote of 8-3.
It will now go to a Public Hearing on Tuesday July 21st prior to any vote by the Council to place it on the ballot. The Council will also adopt legislation for the ordering of all questions on the November ballot (On June 23rd the Council also approved five (5) bond bills for referendum, which will also have public hearings on the 21st). If enacted, the proposed Charter Amendment in CB-48-2020 would have to be certified by the County Attorney and transmitted to the County Board of Elections for placement on the November General Election ballot for County voters.
Please visit the Clerk of the Council website for instructions on public participation, including providing written testimony or verbal comments to the Council.
Community Conversations
The impact of the current public health emergency caused by COVID-19 and police brutality are forcing our nation and this County to re-examine ourselves and our priorities moving forward. George Floyd’s death in police custody has fueled a movement in communities across our nation and here in Prince George’s County, against police brutality and racial injustice and for social justice.
As local leaders, residents are asking that we do things differently and focus on making improvements in addressing these issues. We must work together to achieve the real transformative change we express as a nation and a community – the discussion on this nearly 30-year-old Cap should be part of that discussion as we begin to recover from COVID-19 and address these larger issues.
At the end of the day – the voters of this County would make the decision on the referendum on the Charter Amendment in November. I believe that the voters of Prince George’s County are intelligent and sophisticated enough to evaluate this Charter Amendment and make the final decision in November.
We thank you again for your interest as a resident of Prince George’s County. Please be safe and well. As always, please reach out to my office for any assistance you may need as we are operating remotely at this time.
I am Sincerely Yours in Service,
 Hon. Todd M. Turner
Council Chair
4th Council District |
