Prince George's County Exec Wants to Follow Baltimore City’s High-Tax Lead
Mandatory annual spending increases in education are already one of the primary reasons for Maryland’s perennial budget gap, and they’re about to drive a 15.6% increase in property taxes in Prince George’s County if Rushern Baker has anything to say about it.
To get his way, Baker would have to challenge a 1978 initiative that limited property tax rates in the county to under 1 percent. Known as TRIM, “Tax Reform Initiative by Marylanders,” the plan was adopted to put an end to nearly a decade of out-migration.
And it worked. While 34,000 residents left PG county between 1970 and 1976, the trend was reversed in throughout the 1980s and 90s. The authors of a recent Wall Street Journal article on the situation in PG county sum up the results of TRIM:
Today Prince George’s County is the wealthiest majority-black county in the U.S., with a median household income 39% above the national level and a poverty rate 42% below it. Naturally, some of county’s superior performance owes to its proximity to our nation’s capital. But the county is in the same spot as it was in the 1970s, when it shed population and jobs to its neighbors, even as the federal government exploded in size. TRIM reversed the exodus.
Voters overwhelmingly defeated a challenge to TRIM in 1996, but Baker thinks he can ignore them and TRIM’s tax cap this time around. His justification—that he needs to use the extra tax revenue to increase education funding, as he is legally required to do each year by a state-imposed “maintenance of effort” law—will likely face a constitutional challenge even if PG County Council members roll over and validate his budget and tax plan.
That an increase to local property taxes of this magnitude would be a mistake is no secret. Baltimore City, the only MD county with a higher property tax rate than PG had in the 70s, continues to shed residents and struggle to make ends meet as a functional city. Stephen J.K. Walters and Steve H. Hanke, authors of the WSJ article linked above, wrote in 2008 that we can (and should) blame property taxes for Baltimore’s rot.
Since then, Walters has written a report for the Maryland Public Policy Institute on how to make Baltimore a superstar city. He is also the author of Boom Towns: Restoring the Urban American Dream from the Stanford University Press. Analyzing what makes cities survive and thrive has been the primary subject of his research for years, and one key lesson for local legislators is that cities with low property tax rates are far more likely to hold onto their local businesses and residents.
Overturning TRIM and increasing PG county property taxes would be a surefire way for Baker to push his county down the same road as Baltimore City.