Lower Baltimore's tax rate, and they will come
Originally published in the Baltimore Sun
For decades, Baltimore's elected and appointed officials have tried to stem the city's population loss with game-changers. In came two stadiums, a convention center and hotel, Harbor East, and tax credit after tax credit for the newest development that was going to create thousands of jobs and bring thousands of new residents to the city. Former Mayor Stephanie Rawlings-Blake so believed in the "build it and subsidize model" that in 2011 she was busy planning for 10,000 new families to move to Baltimore by 2020.
Somehow, though, the game never really changed. Sometimes only a trickle of people left, but this year the model practiced by her and her predecessors in City Hall imploded with the news that 6,700 people moved out of the city between July 2015 and 2016, dropping the city's population to a 100-year nadir.
To put the hemorrhaging in perspective, the city lost over 1 percent of its residents and came in third in the nation behind Chicago and Detroit in absolute numbers, according to the U.S. Census Bureau. Let that sink in. Baltimore had the third worst population loss in the entire country. Those regions are much larger, however, so Baltimore's drop will be felt much more strongly here in terms of lost tax revenue.
While the loss may seem shocking, even casual observers could see it coming. The signs of decay have played out in local and national headlines since Freddie Gray's death two years ago and include rising crime, declining public school enrollment coupled with continued poor student performance and the largest deficit in two decades at the Baltimore City Public School System. Last month Baltimore surpassed 100 murders for the year, the worst rate since 1998.
And given that one of the city's largest public companies — Under Armour, which employs about 1,900 people locally — has missed revenue and earnings estimates over the past year and recently announced layoffs at one of its divisions, there may be fewer wealthy millennials able to fill high-rent apartments downtown in the coming year.
But again, the population loss is nothing new — only its size is noteworthy and the fact that elected officials haven't changed their tactics, as if what didn't work in the 1950s, 1960s, 1970s, 1980s, 1990s and 2000s would work in 2017.
It's not too late to turn around the city, though. Mayor Catherine Pugh and members of the City Council can provide the spark needed to bring people back to the city by lowering property taxes.
Why is the city's property tax rate such a problem? It's about twice as high as the state's other counties; it favors developers at the expense of homeowners; it drives people, investment and businesses to surrounding counties; and it attracts nonprofits that don't pay taxes, forcing the tax burden on an increasingly smaller group of homeowners. To that last point, as of 2014 nearly a third of the city's property was not taxable — three times that of surrounding areas and the highest percentage in the state.
We would not be reinventing the wheel if we chose a new path. San Francisco and Boston both illustrate how to lower property tax rates and attract residents, jobs, business growth and investment — and grow the tax base enough to pay for public services. The Maryland Public Policy Institute wrote about those cities' experiences and how they translate to Baltimore in its 2010 report, "How to Make Baltimore a Super Star City." While written seven years ago, its ideas are as relevant as ever.
Many people have talked about lowering property taxes, and panel after panel has suggested it, but little has been done aside from recognizing the problem. Isn't it time that we embrace bold ideas? Or should we wait for the next census review? We know none of the city's problems can be fixed without more people who care about their schools, their property, their neighbors and their streets — and whose tax revenue will help pay for new water mains and more police and new schools.
If Mayor Pugh revived Baltimore, she would not only restore lives at home, but bring hope to all Americans that decline is not the natural state of our cities, only a temporary result of certain policies. By lowering property taxes, we will look back on 2017 as the beginning of Baltimore's best chapter. Let's not wait. 614,664 lives depend on it.
Christopher B. Summers is president and chief executive officer of the Maryland Public Policy Institute, a non-partisan public policy research institute located in Rockville. His email address is firstname.lastname@example.org