Governor O’Malley Announces Plan to Cut Maryland Property Taxes by 3 Cents

O’Malley Continues to Outline Plan to Close the Structural Deficit in Howard County; Announces Penny Increase in Sales Tax – 83.5% of Marylanders Still Pay Less Overall; Sales Tax Would Be Applied to Some Services

ELLICOTT CITY, MD (September 20, 2007) – Governor Martin O’Malley announced today a plan to cut Maryland’s property tax to make the state’s tax structure fairer for working families and those living on fixed incomes.  The announcement comes one day after Governor O’Malley announced plans to make Maryland’s income tax structure more progressive for working families.  The Governor was joined by County Executive Ken Ulman and County residents at the home of Mr. and Mrs. Steven Boughn for today’s announcement. 

“Homeownership is the building block of a strong and growing middle class.  So even as we work to get our State’s fiscal house in order, we also want to help Maryland families harness the strength of their homes, instead of saddling them with the burden of rising assessments,” said Governor O’Malley.  “By reducing the property tax 3 cents for every $100, we will help 1.45 million struggling homeowners, including our seniors and our more fragile neighbors living on fixed incomes.”   

Under Governor O’Malley’s plan, the Maryland State Property Tax will be reduced by 3 cents per $100 of assessed value.  The plan will benefit 1.45 million homeowners in the State of Maryland struggling with rising assessments and provide much needed help for seniors living on fixed incomes. 

“I appreciate the fact that Governor O’Malley continues to include Howard County in his dialogue on how to move Maryland forward,” said Howard County Executive Ken Ulman.  “Howard County is a wonderful place to live and our high property values make property taxes a financial strain for many families, so the Governor’s proposal is a welcome one.”

Governor O’Malley also announced today a one-cent increase in the State’s sales tax – from 5 cents to 6 cents.  Maryland currently has one of the lowest sales tax rates in the country, and ranks 45th in sales tax as a percentage of personal income and 43rd on a per capita basis.  Under the Governor’s income, property and sales tax proposals, 83.5% of Marylanders would pay less overall, as the income and property tax savings exceed the increase in the sales tax. 

Even with the increase Maryland will remain competitive with neighboring states – New Jersey (7%); Washington, D.C. (5.75%); West Virginia (6%) and Pennsylvania (6%; and an additional 1% tax in Philadelphia and Pittsburgh).  Delaware has no sales tax, although it has a gross receipts tax that impacts the price of consumer goods.  Virginia’s tax is 5%; Virginia also taxes food at 2.5%.  West Virginia also taxes food at 5%.  In Maryland, food is exempt from the sales tax.

Under the proposal, Governor O’Malley would establish two permanent sales tax holidays for back-to-school clothes and energy efficient appliances to aid low-income and middle-class families.  The proposal would authorize a two-week sales tax holiday on clothing and footwear items priced at less than $100.  In addition, the sales tax would be applied to some services including health clubs, tanning parlors, massage services, and real estate property management services.  These services were included in the tax package passed by the House of Delegates in 2004.  (Senate Bill 508, 2004)

“I am happy to have Governor O’Malley in my house and I support him in his efforts to improve the quality of life for all the citizens in Maryland and commend him on his efforts to return an open and transparent government to Maryland,” said Penny Boughn.  “It has been a long time since State leaders have come to talk to the citizens of Maryland on a one-on-one basis to hear their thoughts and concerns and I am very happy that Governor O’Malley has come to speak to the people and that we have senior leadership in Maryland once again.”

Yesterday, Governor O’Malley announced his plan to make Maryland’s income tax structure fairer for working families.  Under the Governor’s plan ninety-five percent (95%) of Marylanders would pay less and over 2.1 million tax-filers in Maryland would experience a tax reduction or no change in their income tax.  

Making the Propery Tax Fairer For Middle Class Families

  • Reducing the property tax by 3 cents benefits 1.45 million homeowners
  • Seniors and others living on fixed incomes get much needed help.
  • 85.3% of Marylanders pay less – income and property tax reductions exceed sales tax.
  • Maryland’s sales tax is one of America’s lowest – penny increase keeps us competitive with PA, WVA, and DC.
  • Permanent new sales tax holidays for back to school clothes and energy-efficient appliances.
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