Confirmed: Enterprise Zone, Brownfields and other programs benefit wealthy investors in white neighborhoods. Unaddressed: the politics and profit that keep the subsidies flowing.
Consider the mixed messages coming out of City Hall about what matters most to Baltimore’s movers and shakers: real estate and money.
The Bureau of the Budget and Management Research (BBMR) released a report last week saying the city should cap and even curtail overly generous tax breaks for developers.
At the same time, Mayor Brandon Scott and the City Council under President Nick Mosby are expanding and lengthening the life of three of the biggest subsidies.
Adding to the policy disconnect, both the budget office and the politicians evoke “equity” and “sustainability” as their guiding principles for either shrinking or boosting the giveaway programs.
The BBMR report, whose number crunching was performed by blue-chip accounting firm EY (Ernst & Young), includes an explicit warning:
Left unchanged and unchecked, tax rebates to real estate investors and developers will gobble up 9% of the city’s gross property tax revenues by 2031.
That estimate was made before the City Council expanded the geographic scope of the Enterprise Zone tax credit and reauthorized rebates for upscale apartment construction and historic property renovation.
What is the mayor’s rationale for supporting ballooning rebate programs for wealthy investors – an issue that has sparked community protests over the years and now includes concerns voiced by the city’s own budget director, Bob Cenname?
The programs yield “sustainable and equitable growth” that benefits all communities and taxpayers, Scott declared last October.
Mosby voiced his support for re-authorization by proclaiming that the tax breaks will “bring sustainable solutions that bolster smart and equitable development.”