A key advisory panel is recommending no increase to the state’s property tax for the coming year.
The Commission on State Debt, in a 10-minute meeting Friday, recommended holding the rate on commercial and residential properties at 11.2 cents per $100 in assessed value.
Treasurer Dereck Davis, chair of the panel, said the decision comes during “difficult, trying times.”
“The past few weeks and months have been stressful and busy but productive for the state,” he said.
The panel also recommended maintaining the property tax rate on utilities at 28 cents per $100 of assessed value.
The rates were approved with no debate.
The rates for commercial, residential and utility have not changed since 2007.
The commission meets each year to recommend the state property tax rates. Those rates are later acted upon by the Board of Public Works, chaired by the governor.
State property taxes repay general obligation bond borrowing. Currently there is more than $10 billion in outstanding debt. State law calls for the rate to be set in an amount sufficient to repay the annual debt service.
The current rate does not cover that amount. The gap has been filled with hundreds of millions in cash from the operating budget.
In fiscal 2026, the state will need an additional $156 million in general funds to cover debt service. That amount grows to about $400 million a year later. In fiscal 2030, the general fund will kick in an estimated $500 million for debt service.
State coffers will take in more money in property taxes this year without a rate increase.
In 2025, the state is projected to take in more than $1 billion in property taxes. For 2026, the commission is projecting property tax revenues to exceed $1.1 billion — a 6.3% increase year over year.
Left unchanged, property tax revenues approach $1.2 billion in 2029, according to estimates.
The Department of Assessments and Taxation reassesses properties on a rolling three-year cycle.
All 23 counties and Baltimore City reported increased assessments for seven consecutive years.
The statewide value of properties in Group One for this year increased by 20.1%. Residential properties increased in value by more than 21%. Commercial values increased 16.4%, according to the Department of Assessments and Taxation.
Last year, assessments in Group Three increased 23.4%.
State law caps increases at 10%.
The department mailed notices to property owners in December.
The budget as introduced by Gov. Wes Moore (D) did not include property tax increases. The legislature’s final version raised other taxes but avoided a property tax increase.
The Board of Public Works will take up the recommendation in the next few weeks. The three major bond rating agencies — Fitch, Moody’s, and Standard & Poor’s — are expected to update its credit ratings for the state before the next bond sale in June.
