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Split‑rate property tax bill draws wide testimony as Baltimore City and counties weigh tools to discourage speculation
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Summary
Delegate Von Stewart's HB 78 would allow counties and Baltimore City to set separate tax rates on land and improvements (a split‑rate/land value tax); proponents said it would encourage redevelopment and curb speculation, while chambers and building industry groups warned it could be administratively complex, create appeals and act like a tax increase in weak commercial markets.
Delegate Von Stewart presented House Bill 78 as a tool to realign property tax incentives so that building improvements are taxed less heavily than land value — a split‑rate or land value tax. He and a broad coalition of supporters told the committee the change would encourage redevelopment, reduce speculation, and help address blight, particularly in Baltimore City.
Von Stewart framed the measure as bipartisan and evidence‑based, citing studies from Pennsylvania and other research that proponents say link split‑rate taxation to increased building permits, denser development and, in some cases, increased business establishment. He proposed a gradual, county‑by‑county approach and said SDAT costs could be managed by phasing adoption.
Supporters giving testimony included Baltimore Thrive, conservation and land‑use organizations, county officials and labor unions. Vanessa Beck of Baltimore Thrive said the bill provides parity by extending to counties and Baltimore City the municipal authority to create separate land and improvement rates; Ben Lin (ATU Local 689) and several conservation and county planning witnesses said the tool could incentivize transit‑oriented development and align revenues with local planning goals.
Opposition came from the Maryland Chamber of Commerce, commercial real estate groups, the Apartment Office Building Association, NAOS Maryland and the Maryland Building Industry Association. Their written and in‑person testimony warned that the bill is permissive rather than prescriptive, meaning counties could raise land rates without lowering improvement rates; industry witnesses said that in markets with high commercial vacancy or complex title issues (vacant lots with unclear owners), a higher land rate would not yield revenue and could deepen instability. Several witnesses predicted a surge of appeals and administrative burdens for SDAT.
Legal and technical questions focused on uniformity of taxation under the Maryland Constitution, how land values would be assessed (and made consistent block‑to‑block), title problems for long‑abandoned lots, and whether the vacant and blighted subclass adopted previously has had a chance to work. Supporters urged pilot approaches and phased implementation; opponents pressed for caution based on market conditions and administrative costs.
Virtual testimony included Baltimore City Councilman Zach Blanchard, academic analysts, county officials and union representatives. Blanchard said shifting the tax burden from homeowners and productive businesses to speculative landowners could help address housing shortages and promote investment in walkable neighborhoods.
What happens next: The committee concluded the hearing after extensive debate and testimony and may consider amendments to clarify pilot timing, SDAT procurement and administrative supports, and guardrails to limit county discretion if lawmakers want uniform protections.
