Stokes Threatens To Stall Development Tax Incentives

If Baltimore City Councilman Carl Stokes has his way it will be a while before any legislation seeking special tax incentives for developments could get a hearing.

Stokes said if he remains chairman of the Taxation, Finance and Economic Development Committee he'll hold up any bills creating special tax incentives for projects until the city changes the incentives, such as tax increment financing and payment in lieu of taxes, that are used.

Stokes made the announcement Thursday following his committee’s hearing on the report issued by the

The report found that tax incentives work to spur development but that the process of awarding them could use more oversight and transparency. The report recommended, among other things, creating an independent advisory board to oversee the incentives.  

“It’s worthy not to move anything until we try to be sure most, if not all, the recommendations are put into place,” Stokes said. 

Stokes said he thinks it's fair to prevent any legislation from moving forward until the task force recommendations are implemented because of the amount of work and expertise that went into the report.

As chairman of the committee, Stokes controls the hearing schedule on legislation. It is possible, however, for the eight council members to petition the bill out of committee. An end-run around Stokes could be a tough sell to council members because it would violate legislative courtesy, and council members could want to use the same tactic in committees they chair.

City Council President Bernard C. “Jack” Young appoints committee chairs. With a new council getting ready to step in following the elections, the heads of the committees could be shuffled. 

Lester Davis, Young's spokesman, said the council president hasn't yet considered who will be appointed to committee chairmanships. He said the process isn't political and that Young appoints the council members to the committees they are best qualified to serve on.

Tax increment financing involves the city issuing debt for public improvements to an area being developed privately. The debt is repaid with an increase in property taxes associated with the development. Payment in lieu of taxes allows developers to pay lower property taxes for projects in urban renewal areas, according to the task force's report.

In a news release, Ryan O’Doherty, the mayor’s spokesman, praised the report's conclusion that the city should continue using tax incentives to promote development and create jobs.

But he also questioned the reports failure to mention the “thousands of city jobs” and “millions in new tax revenue” created by the incentives. O’Doherty specifically mentions projects in Charles Village, Belvedere Square and Clipper Mill in North Baltimore as examples of where these tools have been used effectively.   

“If the question is whether or not the city should use tax policy to support economic development, any reasonable analysis of this question should include information about new jobs, new tax revenue, new support for minority businesses, and new investment in city neighborhoods that otherwise would not have occurred without the tax incentives,” O’Doherty said in the news release.

In a separate email, Ian Brennan, a spokesman for the mayor, called the possibility of holding up legislation for tax increment financing or payment in lieu of taxes “reckless” and that it “threatens to kill job creation.”

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