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November 24, 2004

Snookered Again

John W. Ashbury

Alderman William Hall, president pro-tem of the Frederick City Board of Aldermen, has called a special meeting of the board for 9 A.M. today. Aldermen Joseph Baldi and David Lenhart agreed with Mr. Hall’s call for the meeting. This session is necessary to meet state requirements that changes in the application of the Homestead Tax Credit must be made by November 25.

As just about everyone knows, the mayor of The City of Frederick isn’t happy unless she gets her way, even if she has to pull the wool over the eyes of the aldermen at the very last minute.

Jennifer Dougherty seemed to pull a rabbit out of the hat last week when she told the aldermen and the public that a clause in the city’s charter made it illegal for city fathers and mothers to grant tax relief to its citizens in the manner suggested by Alderman David Lenhart and supported by William Hall and Joseph Baldi.

What they had proposed would have imposed a cap on the increase in the assessed value of owner-occupied residential property for tax purposes by the city.

Here is the clause Mayor Dougherty cited when declaring the tax-reduction move “illegal.” The emphasis in boldface and italics is mine.

Sec. 108. Taxable property--Generally.

All real and tangible personal property within the limits of the City of Frederick, or which may have a situs there by reason of the residence of the owner therein, shall be subject to taxation for municipal purposes, and the assessment for said purpose shall be the same as that for state and county taxes; provided, that no authority is given by this section to impose taxes on any property which is now or may hereafter be exempt from taxes by any special or general act of the General Assembly of Maryland. (Acts 1951, Ch. 539, § 108)

What she said was that the City of Frederick would be using a different assessed value if what Mr. Lenhart proposed was adopted. She told the alderman that the city’s legal department had agreed with her judgment. However, what she didn’t say was that the city’s “legal department” only learned of her question about the clause shortly before the aldermen heard about it. It is quite apparent that the city’s “legal department” didn’t have time to research the issue before rendering the decision the mayor wanted.

Mr. Lenhart’s proposal does use the same assessed value as that used by the state and county to calculate taxes. All he is saying is that while the state and county are using the maximum allowed increase value for taxation purposes on owner-occupied residential properties, he wants the city to cut that maximum in half.

State law allows a 10 percent increase in the assessed value for taxation on these type properties. For example, if your current assessed value is $200,000, but the new assessment computed by the State Department of Assessment and Taxation effective next July 1 is $290,000 (to be phased in over three years), the county and the state can only increase the assessed value on which it will base your new real estate taxes to $220,000.

In the second year of the triennial reassessment, it would rise to $242,000, and in the third year it would rise to $266,200. And when the next reassessment cycle begins, the base value on which the state begins to reassess your property will be that $290,000.

Following the same procedure, the city would still be using the state's reassessment figure of $290,000 in value. But the city would ONLY increase the value on which it applies the real estate property tax rate by FIVE percent instead of the 10 percent figure the state and county are using - or value the property at $210,000 for real estate tax purposes.

The assessed value of the property doesn't change, only the amount on which the city’s real estate taxes are applied. The Charter clause the mayor is citing doesn't address this at all.

And it must also be remembered that many localities in the state already apply a lower percentage to the assessed value when calculating property taxes. A prime example is Mount Airy which sets the rate at 100 percent, not 110, nor 105 percent.

But according to Frederick’s mayor, all those localities will now have to change their charters to comply with this section of their charters.

The mayor told the aldermen that former Mayor Paul P. Gordon had been pushing her to make such a claim for “weeks.” So how is it that she “only learned of it” the day she sprung the November surprise on the aldermen?

Even Alderman Donna Ramsburg, a consistent supporter of the mayor and her tactics, said that such surprises at the 11th hour were frustrating.

Alderman Baldi, who has publicly stated his interest in her job, congratulated the mayor on being able to create a six-page presentation to explain her decision even though she had “uncovered” the illegality only that morning.

As to the city’s legal department rendering its opinion in favor of the mayor’s position, it must be remembered that the former city attorney, Heather Price Smith, at the start of this mayor's term in office in 2002, rendered her legal opinions to match what the Mayor wanted. After several months of doing this, she realized that her job was to reflect what the law says rather than what the mayor wanted, and she changed her tactic – beginning to render opinions on the law as it is written rather than as the mayor wished it to be.

Then, of course, Ms. Smith became irrelevant in the city government as it has become more and more obvious that the only REAL legal advice the mayor pays any attention to comes from her father - Robert Dougherty, who is a member of the D.C. bar. At the end of October of this year, Ms. Smith left the city’s employ after a heated discussion with the mayor over matters which remain unclear.

In a reply to an email last week, former four-term Frederick Mayor Ronald N. Young said that he too felt the mayor and the city’s lawyer had misread the charter clause, but that there were several ways to accomplish the same tax relief without all the legal hassle.

The mayor has made a habit of springing surprises on the aldermen, especially those who oppose the manner in which she conducts business. At the end of her first month I wrote a column here wondering if the mayor was the newest incarnation of “Her Imperial Majesty.” She has done nothing as yet to change that question. As a matter of fact, she has only re-enforced that initial image.

A Maryland assistant attorney general ruled on Monday that the mayor of The City of Frederick was incorrect in her assessment that what the three aldermen were proposing was illegal.

As Mayor Young said, there are other ways to make it happen. Let’s hope the aldermen have all had enough surprises for this year and will impose their will on the mayor rather than the other way around – for a change.

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