Baltimore doesn’t need a billionaire to lower its property tax rate
Originally published in the Baltimore Sun
It is very good news that concerned citizens like China Boak Terrell are advocating a competitive property tax rate for Baltimore as Dan Rodricks has noted (“Wanted: a billionaire ‘backstop’ for an epic Baltimore property tax cut,” Sept. 24).
This is progress. For far too long, Baltimore’s elected leaders have failed to appreciate that taxing investment in real or personal property at twice the rate of nearby jurisdictions causes great damage to the city’s economy. Our leaders have fiddled while the city has bled jobs, greatly restricting the set of opportunities available to our residents. This is one of the key “root causes” that we must address to make enduring progress against poverty, income inequality and crime.
In fact, we really have no choice: Being competitive in pursuit of investment is a necessary condition (though not a sufficient one, of course) for any city to thrive and become the kind of place where its most vulnerable residents can flourish economically and socially. Cities elsewhere — and more than one Maryland county — have learned that capping the property tax rate at a competitive level leads to an influx of capital investment and population. Baltimore can and will thrive if it chooses a competitive path forward.
And while it might be nice for a billionaire benefactor to aid in the transition to a lower tax rate, we can achieve that objective without such aid. In the plan we have written frequently about on these pages and elsewhere, we have defined the steps the city can take to achieve a competitive tax rate without impairing near-term budgets.
The time is right for citizens like Ms. Terrell and others who care deeply about Baltimore to bring more pressure to bear on our elected leaders to adopt a tax policy that reverses the city’s economic decline and rectifies the inequities that result from reliance on targeted tax breaks to favored developers. A wide-open election will be upon us very quickly; Baltimoreans need to see which candidates for the mayoralty and the council have the wisdom and courage to solve this crucial problem.
Steve H. Hanke and Stephen J.K. Walters, Baltimore
The writers are, respectively, professor of applied economics at the Johns Hopkins University and chief economist for the Maryland Public Policy Institute.