Discussions about Mayor Brandon Scott’s tax relief plan got off to a rocky start before a Baltimore City Council committee Tuesday after a member warned the plan could harm some homeowners.

Last week, Scott unveiled a long-awaited proposal to offer modest reductions to the city’s effective property tax rate by expanding its Targeted Homeowners Tax Credit. He’d offset some of the cost by raising the cap on the Homestead Tax Credit, cutting into how much residents can save.

A City Council committee on Tuesday exchanged heated words with officials about a bill that would make those changes to the Homestead credit and delayed a vote on the measure.

Baltimore’s Homestead Tax Credit, which has been capped at 4% since the 1990s, effectively shields a homeowner from paying substantially more in taxes if their primary residence grows rapidly in value. For example, if a property’s value grew from $100,000 to $120,000 in a year, a 20% increase, a resident would be taxed as though the property had grown by just 4%.

Scott has proposed increasing that cap to 6%, bringing in an additional $4.5 million annually.

His plan would offer wider relief to homeowners through the Targeted Homeowners Tax Credit, better known as the 20 Cents by 2020 program that reduces the city’s effective tax rate. Residents receiving that credit now pay an effective tax rate of $2.048 per $100 of assessed value. Scott’s plan would reduce that effective rate to $1.99.

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The cost of boosting the Targeted Homeowners Tax Credit is estimated to be $8.3 million annually, the city’s Deputy Finance Director Bob Cenname told council members. Offsetting that cost with additional funds received from the higher cap in the Homestead Tax Credit would bring the net cost to about $3.8 million — a price tag the city can more easily swallow, Cenname said.

Higher-value properties in the city’s wealthier neighborhoods tend to see the most benefit from the Homestead Tax Credit, Cenname said. Canton, Hampden, Riverside and Locust Point top the list of neighborhoods where taxes are reduced most. Neighborhoods with the most properties receiving the credit include The Orchards, Bellona-Gittings, Cedarcroft and Homeland.

The combination of the two tax credit changes would help to distribute savings to more residents, Cenname argued.

“Our idea here is let’s get the rate down across the board for everybody and ask those that are getting the homestead to contribute a little bit more,” Cenname said.

Homeowners whose homes grow in value most rapidly would see the least relief under the proposal, but the administration has pledged that no one will see a tax increase as a result.

Several other pieces of Scott’s tax proposal fall outside of the City Council’s control. The mayor-controlled Board of Estimates will be responsible for adjusting the Targeted Homeowners Tax Credit. The administration also wants to encourage more residents to enroll in the state Homeowners’ Property Tax Credit program, which could offer additional savings on top of the city credits.

Councilman Isaac “Yitzy” Schleifer questioned why council members were being asked to fast-track the legislation when other pieces of the package are not a guarantee.

Schleifer said he was particularly worried about city residents whose properties have rapidly grown in value due to their proximity to development. The councilman said he spent his weekend calculating the potential impact of the Homestead cut on residents around the Johns Hopkins University.

Cenname said past patterns have not shown that level of growth. For the last three years, assessments have increased substantially, he added, but assessments for fiscal year 2027, which begins in July, have been more modest.

“The danger zone is when you have multiple years of back-to-back very high growth,” Cenname said. “We haven’t seen that historically.”

Cenname said he would be “doing cartwheels” should such a scenario arise, however, because it would give the city more income and the flexibility of lowering the effective tax rate further.

Schleifer was skeptical.

“That’s a great hypothetical that we would reduce the rate,” Schleifer said. “In my 10 years on the council, I’ve seen revenues increase on transfer tax and income tax and a whole variety of other taxes. All I’ve seen is increased spending.”

Later during Tuesday’s hearing, officials said they are projecting a $15.1 million surplus in property tax revenue for the current fiscal year, a sum they anticipate will be used to pay for deficits accrued by several city departments.

Other members of the committee questioned how officials plan to reach out to residents to enroll them in state credits like the Homeowners’ Property Tax Credit. Alice Kennedy, the city’s housing commissioner, said the state credit is far more labor-intensive for residents to enroll in because paperwork is required on a yearly basis and residents must verify their net worth, not just income.

Kennedy said broader outreach is needed, but no additional staff have been hired to handle that workload.

Councilman Paris Gray said it was critical that city officials get the outreach started. He urged officials to reach residents through neighborhood meetings with police officials.

“It needed to be pushed out last week,“ he said. ”We really need to have a big focus on that ... and not waiting until September because the deadline is in October.”

Committee Chairwoman Danielle McCray defended expediting Tuesday’s hearing but noted that tax credit discussions are typically not completed in a single session. She recessed without calling for a vote.