[Chat] Article in the Sun about refunds of overpayment of the CVCBD surtax

[Stephen J Gewirtz]

Here is what is in the Sun.

Steve.

> www.baltimoresun.com/news/local/baltimore_city/bal-district0710,0,7178311.story
>
>
>   baltimoresun.com
>
>
>         From Friday's Sun
>
>
>     City to offer refunds
>
>
>       Error affected tax bills in Charles Village and Bolton Hill
>
> By John Fritze
>
> Sun reporter
>
> 7:03 PM EDT, July 10, 2008
>
> Nearly 2,000 residents in Charles Village and Bolton Hill could 
> receive small property tax refunds because of a city error that 
> inflated their tax bills, Mayor Sheila Dixon said Thursday.
>
> Dixon's announcement puts to rest a months-long dispute that began 
> after The Sun reported that a popular credit was not being applied to 
> tax bills for residents of the Charles Village Community Benefits 
> District and the Midtown Community Benefits District.
>
> The districts levy a property tax in addition to rate imposed by the 
> city and, in turn, provide extra services, such as increased garbage 
> collection and security. But the city had failed to apply the 
> Homestead Tax Credit to those additional bills.
>
> "You know, we made some mistakes, and they made some mistakes," Dixon 
> said, referring to the city and the benefits districts. "Let's just 
> fix this and move on."
>
> The city will send letters to residents in the next two weeks. Exactly 
> how many will receive the letter is not yet clear, but a Dixon 
> spokesman said it will likely be shy of 2,000.
>
> The city expects the refunds will cost between $250,000 and $300,000. 
> It was not clear Thursday how the city will pay for that unexpected 
> expense.
>
> After receiving the letter, residents will be required to apply for a 
> refund. A draft of the letter shows the city will offer homeowners the 
> option of taking the refund or, if they believe the money was well 
> spent, simply forgetting about it.
>
> "I'm trilled that the mayor is taking this step," said City Councilman 
> William H. Cole IV, who represents residents who live in the Midtown 
> district. "The city is doing the right thing."
>
> For months, city officials have debated who is responsible for the 
> failure to apply the Homestead Tax Credit to the district's tax bills. 
> At a May 29 City Council committee meeting, Department of Finance 
> officials said the districts would pay for the error.
>
> But district leaders countered that they could not afford the refunds 
> and noted that it is the city Department of Finance that is 
> responsible for calculating the bills. The city Board of Estimates 
> also votes to approve each district's budget. The error appears to 
> have been made for years, long before Dixon became mayor.
>
> An early draft of the 1994 proposal to create the Charles Village 
> Community Benefits District - the city's first residential benefits 
> district - was changed by the City Council to make sure that the 
> credit would apply, documents from the time show.
>
> "We do want anyone who's due a refund to be able to get it without 
> much hassle and we also didn't want it to affect our operational 
> budget," said Peter M. Merles, district administrator of the Midtown 
> Community Benefits District. "It looks like this will solve it."
>
> In Baltimore and other parts of the state, the homestead tax credit 
> has eased property tax bills for homeowners by limiting annual 
> assessment increases for taxing purposes to 4 percent. The credit does 
> not apply to business or rental properties.
>
> City Councilwoman Mary Pat Clarke, who represents Charles Village, 
> introduced legislation earlier this year that required the tax credit 
> to be applied in the future. That legislation, which was approved, 
> raised questions about whether the credit had been applied in the past.
>
> A memo in support of Clarke's legislation drafted by the city Law 
> Department argued that the tax credits should have been applied. The 
> department later revised that memo, limiting its scope solely to 
> future tax bills and not addressing questions about past bills.
>
> Exactly how many people will apply for the refund is unclear. Cole and 
> others said they have received only a handful of phone calls from 
> people asking about the overbilling. In most cases, the refund will be 
> small.
>
> State law sets a three-year statute of limitations on requesting tax 
> refunds.
>
> "I don't think in the grand scheme of things that people are out there 
> waiting for these rebates," Cole said. "But if the money is due to 
> them, they certainly want to know what the process is to reclaim it."
>
> *john.fritze at baltsun.com*
>
> Copyright © 2008, The Baltimore Sun <http://www.baltimoresun.com/>
>


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