An Op-Ed for the Gazette by Councilmember Phil Andrews
It’s bad enough that banks nowadays have come up with a long list of fees that we have to pay them for the privilege of using our own money – dollars that they are making money on day in and day out.
That’s one private sector example that County government shouldn’t aim to imitate.
That’s why I have introduced legislation to prohibit Montgomery County government from charging you and me a fee for the privilege of paying our property taxes. Council President Michael Subin, Council Vice President Blair Ewing, Isiah Leggett, Derick Berlage, and Steve Silverman have joined me in supporting this legislation – insuring its passage. And I’m happy that County Executive Doug Duncan has indicated his support of the Council measure.
There’s absolutely no reason why County government should "nickel and dime" County residents.
All this comes about because the Maryland State Legislature approved a bill, championed by Delegate Peter Franchot, to allow state residents to pay their property taxes semi-annually – or twice a year – unless they choose once-a-year payments. The measure was prompted by a desire to reduce closing costs on home purchases in Maryland, which are the second highest in the nation.
The law allows – but does not require – Maryland counties to charge homeowners a service fee starting July 1, 2000 to cover administrative costs and compensate for the loss of interest income from the property taxes earned by the counties.
You see, under the old system, you and I would have to pay 100 percent of our property taxes at the very beginning of the tax year. That meant that County government got to make money off the "float" – rather than our having the use of our own money. Under the semi-annual setup, County government will still receive 100 percent of our payments by halfway through the tax year – letting us use more of our own money longer and reducing, though not eliminating, the County’s opportunity to make money off our money.
Taxes are the price we pay for civilization, as one wag once put it. And we certainly need collective resources to preserve and improve our collective quality of life for our families here in Montgomery.
However, charging folks a fee to pay their property taxes would be a slap in the face to Montgomery homeowners. According to estimates by the County Department of Finance, the fee on a homeowner with an annual tax bill of $2600 could be about $21. The department estimated the "loss" in income to the County at $4 million – 90 percent of it in losing the income from the "float" on our tax dollars.
In the end, though, it’s not about money – it’s the principle of the thing. We’ve been moving away from the so-called "nuisance" taxes and fees in Montgomery over the past several years – and rightfully so. That’s why the Council is stopping this fee dead in its tracks.