Baltimore's property tax privileged v. punished

Originally published in the Baltimore Sun

Louis Miserendino Jul 4, 2016

When the 2500 block of Pennsylvania Avenue in West Baltimore became the flashpoint of last year's unrest, it ignited a nationwide conversation condemning individuals and institutions that tend to ignore and forget America's most vulnerable communities. But few pundits seem to have noticed that the Baltimore City Taxman has never been one to forget modest neighborhoods like Penn North. The flames that engulfed the CVS Pharmacy at 2509 Pennsylvania Avenue are long gone, but the Taxman continues to hose the row houses on the rest of the block. One house, for example, is an owner-occupied dwelling with an assessed value under $72,000. Its city property tax bill for this year is a stunning $1,500.

Meanwhile, this year's city tax bill (technically a "payment in lieu of taxes") for the 32-story Baltimore Marriott Waterfront is just $1, even though its assessed value is nearly $137 million. Thus the normal property tax rate of 2.248 percent is over three million times higher than the effective rate paid by the owners of the 750-room hotel. It turns out that the Baltimore City Taxman is more inclined to forgetfulness in neighborhoods like Harbor East.

Although the aforementioned example of property tax disparity represents an obscene extreme, it is nevertheless certain that substantial property tax inequality is commonplace throughout Baltimore. Between Coppin State University and Edmondson Avenue, for instance, the property owner living in a $30,000 house on the 2300 block of Winchester Street pays a rate four times higher than the owners of the $49 million shopping complex at Canton Crossing. In East Baltimore, within a block of North Avenue, the owner-occupant of a $25,000 house on Aisquith Street incurs a property tax rate almost nine times greater than the owners of the $117 million Amazon Fulfillment Center on Broening Highway. On the 1200 block of West Mulberry Street, the primary resident of a $17,000 house overlooking the infamous "Highway to Nowhere" faces a rate more than 15 times that faced by the Four Seasons overlooking the Inner Harbor. Back again on the east side, on the 1800 block of Federal Street between Green Mount Cemetery and Baltimore Cemetery, there is a $15,000 owner-occupied house whose property tax rate is almost 16 times higher than the rate on the $164 million glass office tower containing Legg Mason's headquarters.

The litany could be extended ad nauseam.

There is an unsettling reality that we Baltimoreans must acknowledge: Our city has been divided into "Property Tax Punished" and "Property Tax Privileged." Decades of disparate property tax treatment have produced disparate economic impact. In communities where the tax rates are prohibitive, a dearth of investment and employment opportunities plagues vast areas. In select neighborhoods where our city government has granted generous property tax breaks, glitzy development and robust growth have generated prosperity that never trickles down to the rest of the city.

And it never will under Baltimore's current structure of severe property tax inequality.

Sadly, many of our civic leaders seem interested only in expanding the gap between "Property Tax Punished" and "Property Tax Privileged." Consider Sagamore Development's highly publicized Port Covington project in South Baltimore. The public discourse (and Sagamore's aggressive public relations campaign) has been centered on whether or not Baltimore should approve a $535 million tax increment financing (TIF) deal for the project. Much less attention has been given to the fact that Port Covington is already poised to become the latest example of a major project receiving millions of dollars in property tax breaks.

To be fair, no investor would even consider — not for a second — redeveloping 200 acres of land in Baltimore at the standard 2.248 percent rate. It is understandable that Sagamore would pursue status among the "Property Tax Privileged."

But our civic leaders are on the wrong path if they believe that intensifying property tax inequality can generate an outcome that somehow benefits "Property Tax Punished" neighborhoods like Penn North. By now, the inconsistency and injustice of the Baltimore City Taxman should have made it abundantly clear to all of us that narrow and exclusive property tax breaks can lead only to narrow and exclusive renewal. And it should be just as clear to all of us that Baltimore will not experience a widespread and substantial renaissance until it figures out how to provide widespread and substantial property tax relief.

Louis Miserendino is director of the McMullen Scholars Program at Calvert Hall College High School and is a visiting fellow at the Maryland Public Policy Institute. His email is

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