High property tax rate at heart of Baltimore’s woes
Originally published in the Baltimore Sun
Kudos to Eric Hontz for recognizing that Baltimore’s disinvestment crisis is the main cause of its job losses and stubborn poverty — and all the social ills that go along with such trends (“Here’s how to invest in Baltimore’s neglected neighborhoods,” Jan. 17). But we don’t really need a sophisticated new “reconstruction and development” bank to break this cycle. Rather, we need to face the fact that the city’s non-competitive property tax rate, more than twice that of all nearby jurisdictions, has been crippling the city’s economy for decades.
Becoming competitive on this dimension is a necessary step to attract job-creating and productivity-enhancing capital investment. The region’s existing financial institutions stand ready and eager to invest in the city, but it must make economic sense to do so. City officials clearly know this because they give special tax breaks to large-scale developments like Port Covington to offset the city’s non-competitive tax rate. But experience shows that this is mere triage with vast swaths of the city still in decline. Further, it is not fair since small businesses and individual residents lack the political pull to obtain similar breaks.
It’s past time for Baltimore to attract the kinds of investments that enable other cities to grow and their residents to prosper. In this election cycle, voters should demand that candidates embrace tax reform as a key element in their platforms to revive Baltimore.
The writer is chief economist for the Maryland Public Policy Institute.