Maryland failed to send 107,000 property reassessment notices on time, potentially costing counties millions

More than 100,000 property owners in Maryland were not properly notified of their reassessments in January, delaying a time period to appeal and potentially costing local governments millions in property tax revenue.

One-third of Maryland’s 2 million property accounts were reassessed at the end of 2023, leading to sharp climbs in assessed property values for the second year in a row.

The State Department of Assessments and Taxation, or SDAT, is required by law to send notices of the reassessments by Jan. 30. This year, an error with the agency’s vendor resulted in 107,000 notices that went unsent, according to a statement from SDAT Director Michael Higgs.

State officials said they are working to address the issue to ensure property owners still have the allowed 45 days to appeal and that they pay their property taxes later this year.

“It’s just a very unfortunate mistake,” said Sen. Guy Guzzone, a Democrat who chairs the Senate Budget and Taxation Committee.

He said legislation that the Senate and its lawyers are crafting to fix the issue is expected to be “on solid ground” legally to require the new property values to go into effect despite the missed notification window. That bill is still being developed. Without the solution, legislative analysts have pegged the potential lost revenue to counties at $250 million, Guzzone said.

Property taxes are a primary funding source for local governments, making it possible to spend on everything from education and local public transit. In Baltimore County, the taxes make up about 45% of the $2.5 billion general fund revenue in the current 2024 fiscal year, according to county budget documents.

Higgs said those who missed their notices should receive them in the coming weeks. Those property owners will then have the full 45-day period to appeal to SDAT, he said.

“The legislation will ensure that the state reassessment can be completed fairly and accurately and that all appropriate revenues are collected,” Higgs said in the statement.

Higgs’ office did not respond to questions about where the 107,000 properties are located across the state or whether the director would be available for an interview. His statement said the unsent notices were the result of a printing and mailing error by a vendor, the League for People with Disabilities. That vendor has been paid about $151,000 so far this year and $2.1 million in the last decade for SDAT services, according to Maryland’s spending transparency portal.

Statewide, total assessed value on the 767,226 residential and commercial properties rose 23.4% for 2024 — a jump from 20.6% on another third of Maryland properties in 2023.

In Baltimore City, the average 19.4% increase on homes and 16% increase on commercial properties were both below the statewide average of 25.6% and 17.6%, respectively. In Baltimore County, the residential increases were higher — 26.2% — while the increases on commercial properties were lower, at 14.4%.

State law caps the taxable portion of any property assessment increase at 10% annually. Many local governments have adopted further restrictions, like Baltimore City and Baltimore County’s 4% cap on taxable assessments annually.

Baltimore County Executive Johnny Olszewski Jr., a Democrat who is also the president of the Maryland Association of Counties, in a statement highlighted the need for local governments to receive the higher property tax revenues from those reassessments.

“This news is alarming, but we are thankful that legislative leaders have already signaled their intentions to take swift action on this issue,” he said. “It’s critical we ensure local jurisdictions receive their fair share of revenues so that we can remain focused on delivering the core services that our shared residents rely on and expect.”

A spokesperson for Olszewski did not have information about how many properties the problem affected in the county. A spokesperson for Baltimore Mayor Brandon Scott, a Democrat, did not return an immediate request for comment Thursday.

Guzzone said it was not clear when the Maryland General Assembly, which is in session through April 8, may consider the legislation to fix the deadline issue.

House Speaker Adrienne A. Jones, a Baltimore County Democrat, in a statement indicated lawmakers will also look at potential changes at the agency in charge of assessments to prevent similar problems in the future.

“We are still collecting the details on the full extent of this issue,” Jones said. “We take the effects of the delayed assessments very seriously, and the House is looking at all our options to ensure that our counties are not left to deal with the potential revenue shortages. As members of my leadership team have suggested, we will also look at reforms to SDAT, so this will not happen again.”