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Plan to raise sales tax rejected

July 08, 1999|By LAURA ERNDE

The idea of temporarily raising the state sales tax to wipe out Washington County's water and sewer debt was shot down Thursday almost as quickly as it was proposed.

But the Washington County Commissioners hinted that some type of tax increase could be needed to stop the $3-million-a-year bleeding.

Commissioner Paul L. Swartz said an increase in the sales tax from 5 percent to 6 percent on purchases in Washington County would be a relatively painless way of raising $12 million a year.

In five years, the county's water and sewer debt would be paid off and the tax could return to 5 percent, he said.

But when the commissioners floated the idea at a meeting with members of the Washington County Delegation to the Maryland General Assembly, he was told there is virtually no chance the state would pass such a law.

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"On a scale of one to 10, with one being the least likely, I think we're probably talking about an eighth," said Sen. Donald F. Munson, R-Washington.

Munson said three fellow members of the Senate Budget and Taxation Committee balked at the idea when he brought it up recently.

Del. Robert A. McKee, R-Washington, who sits on a legislative committee that deals with taxes, said the county has to exhaust other ways of raising money first.

The county has the ability to raise property or income taxes. County residents already pay a county "piggyback tax" equal to 50 percent of the income tax they pay to the state. The county has the authority to raise that to 60 percent.

"If this doesn't fly, this group of commissioners is going to have to look very hard at that," said Commissioner Bert L. Iseminger.

About $3 million a year of the county's budget is spent on water and sewer debt and paying for the underused Conococheague Wastewater Treatment Plant, he said.

That's money that can't be spent on renovating the county's aging schools, said Commissioner John L. Schnebly.

A sales tax increase would be less of a burden to county residents because it would be collected from tourists and other out-of-town shoppers, the commissioners said.

Also, it wouldn't put Maryland at a competitive disadvantage because the sales tax is already 6 percent in the border states of West Virginia and Pennsylvania.

Not all of the commissioners were enthusiastic about the sales tax proposal.

"The problem is I have yet to see a temporary tax," said Commissioner William J. Wivell. Also, a sales tax is volatile and tied to the economy, he said.

Iseminger said the commissioners will later address other ways to pay down the water and sewer debt.

"If we don't do something about it, it won't be solved within my lifetime or my son's and daughter's lifetime," Swartz said.

Del. Christopher B. Shank, R-Washington, suggested lawmakers and the County Commissioners work on economic development initiatives.

Already proposed is a state revolving loan fund to lure manufacturing companies that use water and sewer.

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