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  • Writer's pictureCenter for Local Policy Analysis (CLPA)

Pre-filed bill would bring property tax relief to Prince George's County School employees

For many people, owning a home is a dream come true. It's a place to build memories, raise families, and establish roots in a community. However, homeownership also comes with financial responsibilities, and property taxes are a significant recurring expense. A bill recently pre-filed in the Maryland General Assembly aims to alleviate some of this financial burden for certain residents. Let's delve into the details of the proposed legislation and what it could mean for Prince George's County residents.


Understanding the Bill


Title: PG 503–24, Prince George's County – Property Tax Credit – Public School Employees*

Sponsored by: Senator A. Washington

Applicable Tax Years: Beginning after June 30, 2024

Purpose: The bill's primary objective is to enable the governing body of Prince George's County to provide a property tax credit to eligible employees of the Prince George's County Public School System who own homes in the county.


Who Are Eligible Employees?


To understand the bill fully, it's crucial to define who the "eligible employees" are:


An eligible employee, according to the bill, is someone who meets the following criteria:

  • They are a full-time Prince George's County Public School System employee.

  • They have been working for the school system for at least two years.

  • They own a dwelling (home) in Prince George's County.

However, it's essential to note that individuals who provide goods or services to the school system on a contractual basis are not considered eligible employees under this bill.


Property Tax Credit


The heart of this bill lies in the property tax credit it seeks to provide. Here are the key aspects of this tax credit:

  • County Property Tax Reduction: The bill empowers the "governing body of Prince George's County" to grant a property tax credit to eligible employees. This credit is designed to reduce the property tax imposed on their dwellings, making homeownership more affordable. It is not spelled out in the bill, but a "governing body" traditionally includes the County Executive, the County Council, and relevant County agencies.

  • Limits on the Tax Credit: While the bill aims to provide financial relief, there are limits in place to ensure it is sustainable for the county. The tax credit cannot exceed the lesser of two amounts:

    • $2,500]

    • The actual amount of property tax imposed on the dwelling

In other words, eligible employees can receive a credit of up to $2,500 or an amount equal to their property tax bill, whichever is less. This cap ensures that the county can manage its budget while still providing valuable tax relief.


Local Rules and Flexibility


The bill also grants the governing body of Prince George's County the authority to establish local rules related to the property tax credit. This includes determining:


  • The exact amount of the credit (as long as it doesn't exceed the limits mentioned above).

  • How long the credit will be available.

  • Any additional eligibility requirements for eligible employees.

  • Procedures for applying for the credit and how requests will be processed.

  • Any other necessary provisions to carry out the bill's objectives.


This flexibility allows the county to tailor the program to its unique needs and ensure it operates efficiently.


Reporting Requirements


The bill includes a reporting requirement to monitor the effectiveness of the property tax credit program and its impact on the community. Specifically:

  • Five years after the effective date of a local law passed by the Prince George's County Council to establish the tax credit, the Prince George's County government must submit a report.

  • This report must detail the number of Prince George's County Public School System employees who received the tax credit in the preceding five years.

  • The report will be submitted to various government bodies, including the Prince George's County Delegation, the Prince George's County Senators, the Prince George's County Council, and the Prince George's County Executive.

This reporting ensures transparency and accountability, allowing both policymakers and the public to assess the program's impact over time.


Potential Benefits and Implications


Now that we clearly understand the bill, let's explore its potential benefits and implications for the community.


1. Financial Relief for School Employees


One of the most immediate benefits of this bill is the financial relief it offers to eligible employees of the Prince George's County Public School System. Property taxes can be a significant financial burden for homeowners, and a tax credit can make a meaningful difference in their annual expenses.


Employees who meet the eligibility criteria and receive the maximum credit could mean up to $2,500 in annual savings on their property tax bills. This extra money can be used for various purposes, from covering essential household expenses to investing in their children's education.


2. Encouraging Homeownership


The bill also encourages homeownership among school employees by providing a property tax credit. Owning a home can provide stability and a sense of belonging to a community, which can be particularly important for educators who play a vital role in shaping the lives of local students.


Additionally, this incentive may attract more educators to live and work in Prince George's County, further strengthening the local school system and community ties.


3. Local Control and Flexibility


The bill's provision for local rules and flexibility is a key feature. It allows Prince George's County to adapt the tax credit program to its specific needs and changing circumstances. County officials can adjust the amount of the credit, eligibility criteria, and other details as necessary to ensure the program's success and sustainability.


This local control empowers the county to fine-tune the program over time, making it more effective and responsive to the evolving needs of its residents.


4. Transparency and Accountability


The reporting requirement is an essential component of the bill. It ensures that the program's impact is regularly assessed and that the public and policymakers have access to relevant data. Transparency and accountability are crucial for maintaining public trust and making informed decisions about the program's future.


5. Potential Economic Boost


Although not explicitly stated in the bill, there is potential for a broader economic impact. When eligible employees save on property taxes, they may have more disposable income, which can stimulate local spending. This, in turn, can benefit local businesses and contribute to the economic well-being of Prince George's County.


Conclusion


The proposed bill, "Prince George's County – Property Tax Credit – Public School Employees," offers a promising opportunity to provide financial relief to eligible employees of the Prince George's County Public School System who own homes in the county. By reducing property taxes, the bill aims to make homeownership more accessible and encourage educators to live and work in the community they serve.


While the bill provides a framework for the property tax credit program, it also grants flexibility to the county to tailor the program to its specific needs. These local control and reporting requirements ensure that the program remains effective, transparent, and accountable over time.


CLPA will be watching closely to see how this initiative unfolds and how it will impact the lives of eligible school employees and the broader community.


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