Hogan: Use property tax cut money for school construction

Friday, Feb. 10, 2006

Instead of cutting the state’s 13.2-cent property tax by 2 cents, Sen. Patrick J. Hogan wants to use that revenue — between $50 million and $70 million — for school construction.

Gov. Robert L. Ehrlich Jr. (R) has included the tax cut in his fiscal 2007 budget. The cut would save $80 on the annual tax bill of a home assessed at $400,000.

Early in Ehrlich’s term, the Board of Public Works increased the state property tax 4.8 cents to cover debt payments. Democrats have pinned the blame for the property tax hike in 2003 squarely on Ehrlich as a budget-balancing maneuver that followed a stalemate on legalizing slot machines.

Last year, the governor tried to get a 1-cent reduction but was rebuffed by the two other members of the board, Comptroller William Donald Schaefer (D) and state Treasurer Nancy K. Kopp (D).

Although the state could still cover its debt payments if the tax rate is cut this year, analysts predict that it would need to be increased again in 18 months to two years.

‘‘Everybody wants a property tax cut. But is it sustainable? When will the [state] run out of money thereby requiring the property tax to be raised again?” asked Hogan (D-Dist. 39) of Montgomery Village. ‘‘You cut the tax, and a year later you raise it back up? People are smarter than that.”

Ehrlich has proposed spending $281 million for school construction. County leaders are pushing lawmakers to seek $400 million.

Hogan is vice chairman of the Senate’s Budget and Taxation Committee. The panel’s chairman, Ulysses Currie, said he thought the leaders of the House and Senate would support Hogan’s idea.

‘‘Nothing is greater than the need for school construction and I believe the public would support moving that money to school construction,” said Currie (D-Dist. 25) of Forestville.

Ehrlich chuckled when told of the senators’ ideas, and his communications director, Paul E. Schurick, described Hogan’s approach as ‘‘a gimmick.”

‘‘There’s a way we could eliminate school construction as an issue: Pass slots,” he said, asserting the General Assembly should provide both tax relief and school construction money.

‘‘I think they should be debated separately,” Ehrlich said. ‘‘You could literally connect any spending need with school construction.”

Schaefer said this week that he does not believe the property tax should be cut.

‘‘Now is not the time to be cutting taxes,” said Schaefer, normally an Ehrlich ally. ‘‘Let it alone for a couple of years.”