Remarks on bill 26-0152 Installment Payment Plans - Property Taxes in Arrears - Residential Property

Finally, after several years of advocacy from so many residents, advocates, and myself, we are introducing legislation requiring the Department of Finance to create payment plans for residents whose property taxes are in arrears.

The Department of Finance is ready to implement payment plans as soon as we pass this bill.

You may remember that in 2021, we passed my bill to create installment plans for residents who wanted to pay their property taxes monthly, rather than two times per year. The Department of Finance was able to implement that as their future tax savings program initially. I look forward to working with them on full implementation of this bill as well.

This bill before us today requires the Department of Finance to create payment plans for owners of residential properties who are behind on their property tax payments.  It took a long time to get here because the Department needed the technology to provide the payment plans, and the proper authorization did not come from the General Assembly until recently.  Now all the stars align to provide this service. Moreover, a lawsuit filed by residents in Edmondson Village helped to push the establishment of payment plans along.

The goal here is to assist residents to avoid tax sale. As we know, tax sale is the predatory way that Maryland collects property taxes and fees. Maryland is one of only 20 states that still collects taxes in this predatory way. When property taxes, environmental citations, and other municipal fees are not paid by the tax sale, the lien goes up for auction and is purchased by an investor. The city is made whole, and the investor goes to the owner of the property to collect the lien, 12 percent interest (18% in the rest of the state), and the additional legal fees. A $750 bill could easily be $3,000 in a matter of months. The investor cannot foreclose for two years to attempt to collect and often residents have to decide between paying the investor, or paying for medications, BGE, or food. We should not be forcing residents into this set of false choices. 

I have spent most of my community development career working with a deeply committed coalition of legal professionals and residents to reform this tax sale system, chipping away at it by passing legislation, advocating for more protections and reforms at the state level, and raising awareness. Establishing payment plans is a major milestone in our efforts toward reform and a more humane way of tax collection. 

Payment plans alone are not going to be the gamechanger. The outreach to ensure residents know they can apply is essential. This is a similar conversation we’ve had on another bill, and we will continue to advocate for intentional outreach to ensure residents can take advantage of this new program.

Thank you to Mayor Scott for your understanding of these issues and working with me on this legislation along with additional efforts to reform the tax sale system. Thank you to residents for your patience as we work through this. Thank you to our advocates who keep pushing. And  thank you to my colleagues for your support.