The fate of two proposed ballot questions, one that would reduce Baltimore’s taxes and another that would offer payments to new city parents, hangs in the balance following oral arguments before Maryland’s highest court Wednesday.
The Supreme Court of Maryland took up the two cases after separate Baltimore Circuit Court judges found that each question should not appear on ballots for city voters to consider this fall. Each judge ruled that their respective question was outside the scope of changes that citizens are able to make to the city’s charter. The organizers behind each question collected more than 10,000 signatures from qualified city voters in an effort to place the questions on the ballot, one of two local methods to enact a change to the city’s charter.
The court, which took the matters under consideration, has a short window to rule on both ballot questions. The Maryland State Board of Elections is due to begin the process of printing ballots for the November election on Sept. 6.
The court heard arguments first from Renew Baltimore, a coalition of economists and former city officials who are seeking to slash and cap Baltimore’s property tax rate. The question, which organizers collected more than 23,000 signatures in support of, would nearly halve the city’s property tax rate over seven years, from 2.248% to 1.2%. The Baltimore City Board of Elections notified the group in July that the measure would be stricken from the ballot, arguing that only the mayor and City Council have the power to set the property tax rate.
Circuit Judge Althea M. Handy sided with the board, finding that the ballot question “would take all power and discretion from the City Council and their ability to legislate and determine the tax rate.”
Attorneys for Renew Baltimore argued the proposal is legal because courts have determined that residents can place reasonable limitations on their government’s power to tax by way of charter amendments. The group postulates the tax break would boost the city’s population, thus increasing the number of taxpayers and making up for a projected multimillion-dollar reduction in city revenue.
Chief Justice Matthew J. Fader asked attorneys for the group about the possibility that revenue may not go up as projected. “If that prediction is incorrect and revenue goes down, you will have significantly reduced the discretion of the council because they won’t be able to raise the tax rates,” he said.
“The mayor and City Council will still have tons of discretion to adjust the funds,” argued Constantine Themelis, an attorney for Renew. Themelis said city leaders would have the option to further lower tax rates.
In fiscal year 2023, Baltimore brought in roughly $3.6 billion of revenue, almost 30% of which — about $1 billion — came from the property tax, according to the city’s annual audited report. Renew Baltimore’s critics argue its proposal would cut city revenue by one-quarter and require dramatically slashing city services.
A 1990 appellate decision at the center of the election board’s argument distinguished between voters placing a cap on a legislature’s ability to set a tax rate and rolling back the tax rate. In that case, appeals judges determined that a charter amendment could be used to set a cap, but not to roll back the rate, according to court filings. Thomas Chapman, an attorney for the Baltimore City Board of Elections, argued Renew’s proposal would effectively set the tax rate via a cap.
“If you cap the rate and they’re not able to generate enough revenue, doesn’t that tie the city’s hands?” asked Justice Angela M. Eaves.
“There is no reliable evidence to support that the city is going to be unable to do that,” Themelis replied. He dismissed a filing from Baltimore finance officials arguing the cut would be catastrophic to the city’s budget, and instead pointed to a report from Sage Policy Group in support of the effort. Anirban Basu, chairman and CEO of Sage, is one of Renew’s primary backers.
Judges also heard arguments related to a ballot question commonly known as the Baby Bonus which would pay city parents $1,000 upon the arrival of a new child. The question, sponsored by the Maryland Child Alliance, is designed to alleviate childhood poverty.
In the case of the Baby Bonus, it was the city that sued to have the question removed from the ballot, arguing that it exceeds the authority of citizens. The Baltimore City Board of Elections had previously approved the question to appear on ballots. Baltimore Circuit Judge John Stanley Nugent sided with the city earlier this month, granting an injunction.
Attorneys for the Maryland Child Alliance and the Baltimore City Board of Elections, which is a party to the case, argued that the city would maintain discretion to make decisions about how to implement the Baby Bonus. The proposal would require payments to new parents, but it would allow city officials to determine instances in which a nonbiological parent might be eligible, argued Chapman, representing the election board. The council could also weigh how a person’s residency is determined and the method that would be used to pay new parents, he said.
Fader said the details left to be fleshed out by the ballot question seemed more administrative than policy-setting.
“[The argument is] it’s putting the decision-making into the charter but it’s not,” Fader said. “It’s putting the decision made by the voters into the charter.”
Attorney Thomas Webb, representing the city, argued that citizen charter amendments are designed to propose structural changes to government, not to legislate, which is the job of the City Council.
Attorney Mark Stichel, representing the Maryland Child Alliance, said the group was willing to strike the specific $1,000 requirement, leaving a policy that a payment be made to new parents.
Chapman, who reviews all proposed ballot questions on behalf of the Baltimore City Board of Elections before they are placed on the ballot, asked the court during his final remarks to establish a clear test for whether a ballot question complies with Maryland’s constitution.
“Our highest interest here is having a clear and administrable rule for what counts as proper charter material, both for the sake of our own operations and reducing litigation and also for the sake of petition sponsors who should be able to know before they go into a burdensome and time-consuming petition drive whether their petition is lawful,” he said.