Leggett Moves to Reduce Proposed Property Tax Increase

Leggett Moves to Reduce Proposed Property Tax Increase

Announcement comes after Gov. Larry Hogan says he'll allow longer repayment period for Wynne case obligations

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Ike Leggett (file photo)

Aaron Kraut

Updated at 5:20 p.m. – County Executive Ike Leggett on Wednesday announced he has cut his proposed property tax increase nearly in half after the approval of a state bill to allow the county a longer repayment period for income tax obligations it owes thanks to last year’s Wynne Supreme Court case decision.

Leggett said the move was a possibility when he first announced his proposed 8.6 percent property tax increase March 15 for the fiscal year that will begin July 1 and run until June 30, 2017. But at the time, the outcome of the state bill remained unresolved.

Upon getting word that Gov. Larry Hogan won’t veto the law, Leggett announced Wednesday his amended property tax increase will amount to an extra 2.1 cents per $100 of assessed property value, as opposed to the extra 3.94 cents per $100 of assessed property value he originally proposed.

The county said that means the average county homeowner would pay an extra $21.17 a month instead of the originally proposed extra $27 a month.

Last year, the Supreme Court ruled that Maryland was unconstitutionally denying a credit on the county portion of state income tax for those who pay taxes on out-of-state earnings.

Leggett estimated in March the county would be on the hook for $50 million in income tax revenue next fiscal year without the bill, but said Wednesday the bill will reduce that obligation to $17 million.

“My initial proposed operating budget includes $50 million to cover Wynne case costs,” he said Wednesday in a prepared statement. “I promised our state delegation that if they passed legislation that would extend the back payments to the state I would reduce my property tax increase request. They have delivered, I have amended my proposed budget to reflect the savings from that legislation, and I recommend to the council that reduction. The timing of credits to the affected taxpayers will not be delayed.”

The bill, sponsored by District 18 Sen. Rich Madaleno and District 17 Sen. Cheryl Kagan, allows Montgomery County to repay its Wynne case obligations over a longer period of time than initially set by the state. Leggett told County Council members he expects the bill to be signed into law Thursday.

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