Annapolis Backs State Bill to Seek Non-Property Tax Revenue
Annapolis leaders are calling on the state government to study how the city, and other municipalities, can diversify their funding sources beyond the current reliance on property taxes.
The Annapolis City Council voted unanimously Monday to support a Maryland General Assembly bill that would make a task force to study municipal and county revenue sources, revenue streams currently unused by these local governments, and revenue sources used by local governments in other states. The legislation, led by Montgomery County Democrat Jheanelle Wilkins, passed the House of Delegates on Monday 100-33, sending the legislation to the state Senate.
The bill is the top legislative priority for the Maryland Municipal League, which works on behalf of Maryland’s incorporated cities and towns. In written testimony, the organization called overreliance on property taxes “unsustainable pressure” that can directly threaten housing affordability.
Maryland, according to the Maryland Municipal League, is one of six states that does not share sales tax with local governments or allow local governments to collect sales tax.
About 60%, or $70.19 million, of Annapolis’ general fund is raised through property taxes each year.
Annapolis Mayor Jared Littmann, a Democrat, said in an interview that he supports the task force and future legislation to allow municipalities to take from existing sales tax currently collected by the state. Littmann said he would not support adding a city-specific sales tax.
“People from outside Annapolis come into our city and enjoy our wonderful city, which is wonderful, and we want to capture that,” Littmann said. “If we could generate more revenue from that portion of people who are coming into the city and using our services, then we can give it tax relief to our residents.”
At least 12 other municipalities have sent letters supporting the bill. The City Council’s Monday vote acted as formal support for the bill and allows a copy of the resolution to be sent to the city’s state delegation.
Along with concerns about the reliance on property taxes, the letter also mentions that the city is home to several property tax-exempt government buildings, including the State House complex, the U.S. Naval Academy, county facilities and the state’s two highest courts.
Ward 1 Alderman Harry Huntley, the chair of the city’s budget committee, said that to be fiscally resilient, the city needs to diversify its revenue.
“You wouldn’t run any business in a way that you’re overly reliant on one revenue source because if there’s any impact to that revenue source, it would have a downside to that business,” said Huntley, a Democrat.
If passed, the task force would be made up of representatives from the state Senate, House of Delegates, Maryland Municipal League, Maryland Association of Counties, and Baltimore City. The task force would submit a report by Dec. 1 with findings and recommendations.