Montgomery County taxpayers are angry that their property tax bills are rising as their property values plummet. “I was expecting that the property taxes would in some way reflect the value of my home,” said Bethesda resident Markus Mueller, whose tax bill increased while his property value dropped by $41,000.
“I thought because my assessment this year dropped approximately $129,000, that my taxes would be somewhat lower,” Rockville residents Joseph and Lynn O’Leary wrote in a letter to County Executive Ike Leggett. “They are over $860 more.”
| What goes in your tax bill? |
| County property tax |
| State property tax |
| Municipal district property tax: Paid by residents of a municipality such as Rockville or Gaithersburg |
| Development district and special taxing district property tax: Paid by property owners in areas including Kingsview Village Center, West Germantown and White Flint |
| Solid waste charge: Covers the cost of trash and recycling services |
| Water quality protection charge: Helps pay for inspection and maintenance of storm water facilities. Increased this year |
| Bay restoration fund fee: Supports improvement of the Chesapeake Bay’s water quality. Most county taxpayers pay this with their utility bills, but taxpayers who don’t receive water service from a public utility pay this with their taxes. |
The average property tax bill in the county rose 1.7 percent, said County Councilman George Leventhal, D-at large.
Officials say the increase, despite the drop in assessments from their housing bubble highs, comes from a cap on property taxes as well as the increase in the tax rate that the County Council approved in the spring.
The homeowners property tax credit — which credits taxpayers for a primary residence — capped the taxable portion of a property assessment, preventing the taxable assessment from increasing more than 10 percent per year. But when assessments fall, the caps don’t also drop, meaning many residents pay a higher rate.
The County Council voted in May to increase the property tax rate by 4.2 cents to 94.6 cents per $100 of assessed value so that revenue would remain about the same when property values fell.
Property assessments, done every three years, have fallen countywide since the peak of the housing bubble, except in some areas of Bethesda, Chevy Chase and Potomac where values have largely stayed the same or inched up, said Arnold Gordon, chairman of the Montgomery County Property Tax Assessment Appeals Board and former president of the Montgomery County Civic Federation.
Montgomery County saw an average 17.4 percent drop in property values in three years, The Washington Examiner reported in December. The median home sale price dropped from $450,000 in July 2006 to $385,000 five years later, according to regional real estate tracker MRIS Inc.
Complaints from taxpayers come every year as bills arrive in the mail, said Leventhal, who sent a detailed response to taxpayers who wrote him. But he recognized that for many residents, times are particularly hard this year.
Some residents say the latest rate increase is pushing people into other counties.
“I can understand why many, many people are leaving Montgomery County and moving elsewhere,” said Gaithersburg resident John Carr. “It’s because of our taxes.”
A reduction in tax rates is unlikely, especially since income tax revenue will likely decline in the near future, Leventhal said, pointing to recent market turbulence.
“I wish things were different,” he said. “I wish I could promise everybody apple pie and ice cream three meals a day.”
