The Maryland Supreme Court‘s decision to nix the ballot initiative to reduce Baltimore City’s taxes was a sad day for our city. The members of the Renew Baltimore coalition and the 23,542 residents who signed the petition from across all neighborhoods of the city understand that tax reduction is essential to Baltimore’s future. These are the people who care about our city and are deeply concerned about what is happening to it, not the entrenched politicians and well-connected developers who benefit from the pay-to-play system embedded in our city and support the current system of high taxes for you but not for them.

First, some quick facts. Baltimore City is losing 500 people a month in population, so the current system is clearly not working or sustainable. The city’s property tax rate of $2.248 per $100 of value is the highest in the state and more than double the rates of the surrounding counties, which renders us uncompetitive.

Our tax reduction plan was carefully crafted and vetted based on sound economics and proven examples of success in other major cities. San Francisco, Boston, and most recently Washington, D.C., initiated sharp tax reductions that led to large increases in population following decades of decline. The petition was going to do what every mayor of our city promised when he or she was campaigning but never had the guts to do once in office. It established gradually declining tax rate caps, allowing the mayor and City Council to set the rates within those caps.

When Mayor Brandon Scott first ran in 2020, he said the city’s high property tax rate “puts us at a competitive disadvantage when compared to surrounding counties. High property taxes not only dissuade potential home buyers but cost those who do choose to buy in the city potentially hundreds of thousands of dollars in lost equity over a homeowner’s lifetime. This is deeply inequitable to the city’s homeowners.” But since taking office, the mayor has bashed the ballot initiative and his office called it “downright terrible policy.”

Critics of the plan say the city can’t afford to reduce its taxes, that services would be curtailed and the city would go bankrupt. The fact of the matter, however, is that the mayor and City Council do not want to abandon the pay-to-play system that allows them to remain in power. The clearest example of this is the $641 million that the city received from the federal government under the American Rescue Plan Act that has produced no positive results for the city.

The city’s history of keeping tax rates high while spending hundreds of millions of dollars in funds on new development projects has produced insidious results. Baltimore’s mayors have used a combination of direct subsidies, tax breaks and special financial arrangements such as TIFs for the development of Harbor East, Harbor Point and Port Covington, all with the collaboration of wealthy, well-connected owners and developers. On the surface, we have a whole bunch of shiny new highrise office buildings, condominiums and apartments. But all of this just equates to a zero-sum game of movement of businesses and new development and a sacking of our Central Business District.

Consider the example of the investment firm T. Rowe Price, which is on the verge of moving its headquarters from Pratt Street to Harbor Point, only to leave a gaping hole in its office space in the Central Business District. Similarly, energy supplier Constellation moved from its location on Pratt Street to Harbor Point several years ago. And a number of law firms have relocated to Harbor East and Harbor Point. Through all of this, our city has continued to lose population and private-sector jobs. We have been simply rearranging the chairs on the deck of the Titanic.

Similar bad results are about to be repeated with the plans conjured up behind closed doors between MCB Real Estate managing partner David Bramble and our mayor that will result in the razing of the once-hugely-successful Harborplace, replacing it with twin high-rise luxury apartment buildings that will cost the city millions of dollars. All of this represents the definition of insanity rather than sound public policy. End the system that enables elected officials to help out well-connected developers with tax breaks and subsidies, and replace it with a fair and equitable real estate tax rate.

David F. Tufaro (dtufaro@terranovaventures.com) is the founder of real estate development company Terra Nova Ventures and is a member of the Renew Baltimore coalition.