Thursday, Feb. 7, 2008

Businesses bemoan assessment increases

Slumping economy makes absorbing higher property taxes difficult

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Laurel business owners say recent property assessments have provided an opportunity for the Maryland State Department of Assessments and Taxation to collect unreasonably high taxes.

The assessments, conducted every three years, were sent out in late December and will increase the value of both homes and business properties in Bowie, Laurel and Upper Marlboro based on fair market values over the next three years.

Business owners have until Feb. 11 to appeal their assessments.

Joe Tredway, president of the Laurel Board of Trade, said businesses are in distress due to a lagging economy, and the new assessments and consequent higher taxes will only exacerbate the ills of local businesses, which have been less profitable in recent times.

‘‘You’re hitting the small businesses right in the pocket,” said Tredway, owner of PG Office Supply Co., which recently merged with Branch Office Supply in Landover because of competition from larger stores selling similar products. ‘‘I just don’t see things getting any better with the shape of the market now,” he said.

Though an annual $3,000 cap exists on how much property values can increase on homes, no such cap exists for businesses.

If a business owner defaults on his or her property tax bill, the local government can place a lien on the property, said Bill Stansbury, deputy director of the Maryland State Department of Assessments and Taxation.

George Delaney, owner of the mixed-use Delaney Properties Inc. on Main Street, called this year’s assessments the most disastrous occurrence in Laurel in many years.

‘‘This should be a legislative issue,” he said. ‘‘[The government] should recognize the negative impact this is going to have. ... They’re killing the incentive to stay here.”

Delaney said the taxes on his property would increase 100 percent over the next three years, and that he may have to pass some of the higher taxes onto his seven residential and three commercial tenants in order to make ends meet.

‘‘I’m going to have to pass some of it on,” he said. ‘‘It’s a risk I’m going to have to take, but we also have to survive.”

He declined to say how much more in taxes he has to pay.

James Soresi, supervisor of assessments for Prince George’s County, said approximately 1.5 percent of property owners appeal their new assessments, and the process is simple. A property owner wishing to appeal checks a box on his or her assessment form, mails it in or sends it online to the assessment office and waits to learn the date of his or her appeal hearing.

‘‘They have to show that the sales in their neighborhood do not indicate the value ... we assessed,” Soresi said.

Ron Sargent, whose Outback Leathers property is among the largest business properties on Main Street, said he plans to appeal his assessment.

Sargent said his property value has increased a total of $866,000. The initial assessment in 2000 was $300,000 and it will increase to $1.2 million over the next three years.

He said he would not have minded the higher taxes as much if the current market were a buyer’s market. But he said the current property slump makes the steep assessments all the more damaging.

He paid about $6,000 in taxes last year, he said, and expects that number to go up to about $24,000 over the next three years.

‘‘I’m not a newcomer to the assessment process,” Sargent said. ‘‘They tell you what it’s worth. You say it ain’t. They try to prove to you that it is, and they usually win. ... I knew somebody was going to pay for Route 1 [development]. I just didn’t know it was going to be me.”

E-mail Anath Hartmann at