Montgomery County (Map, News) - A key Montgomery County council committee voted unanimously Friday to cut the property tax rate while also reducing tax credits for home-owners, reversing a major component of County Executive Ike Leggett's budget plan.

In March, Leggett recommended an 8.3 percent hike in the property tax rate, the largest increase in more than 20 years, saying "the state of the times" required the increase to maintain services. At the same time, Leggett proposed a $1,014 tax credit for homeowners, which he said would make the tax increase more progressive.

But members of the council's Management and Fiscal Policy Committee moved Friday afternoon to decrease the property tax rate by 2.2 percent from the current year and cut the homeowner credit from this year's $613 to $361.

The lower property tax rate would benefit both homeowners and renters, one council member.

"Some people tried to say if you didn't own a home, you wouldn't feel the tax increase, but of course you would, those increases would have been passed on to renters," Council Member Valerie Ervin, who represents residents of the numerous apartment buildings in Wheaton and Silver Spring, said.

Leggett's plan and the council proposal appear to generate roughly the same amount of revenue, according Patrick Lacefield, spokesman for the county executive, said. But there are concerns that the committee's recommendation would hammer those who own less valuable properties.

Committee members sparred over whether to reduce raises promised in county employee contracts to help close the county's $297 million budget deficit. But no final decision was reached.

"Taxpayers, service recipients, and employees as well...we need everybody's help," Council Vice President Phil Andrews said.

Andrews has spoken out against the often 8 percent raises in many of the contracts, saying few county residents are likely to see similar raises in the private sector. Ervin, a former labor organizer, said she did not favor altering contracts.

Council Member Duchy Trachtenberg, who chairs the fiscal policy committee, said she wanted the council to cut $40 million from employment costs.

But when she suggested cutting two percent cost of living raises for some county employees, she was heckled by a large contingent of union workers, who had booed Andrews earlier.

"I think it is important to say that as an elected council member I stand for all of you but also the rest of the one million residents of this county," Trachtenberg said.

kmiller@dcexaminer.com