Transfer tax for school funding unlikely

February 03, 2001

Transfer tax for school funding unlikely

By LAURA ERNDE / Staff Writer

ANNAPOLIS - While state officials talk about the "Golden Age of School Construction," there are still Washington County schools with roofs that leak and classrooms that are cold in the winter and hot in the summer.

Maryland is in the middle of a four-year, $1 billion school construction boom that in many ways has greatly benefited Washington County. The state has helped pay for every school renovation and addition project the county has requested.

But some community leaders worry that Washington County is getting shortchanged because it can't afford to match the state grants available.

As one solution to the county's money woes, the Washington County Commissioners are asking the local delegation to the Maryland General Assembly this session for a 1 percent transfer tax. Every real estate transaction would be subject to the tax.


Lawmakers are resisting the idea. Even a compromise of a half-percent tax that would raise $600,000 a year solely for school construction has fallen on deaf ears.

Opponents in the legislature say they don't favor taxes, especially the transfer tax. They say it would discourage people from becoming homeowners and penalize longtime county residents who choose to downsize their homes.

But the commissioners, who are left trying to balance the budget, say they are running out of options and may be left with no choice but to raise property taxes.

The school construction issue is a perfect illustration of the county's budget crunch.

In his second term, Maryland Gov. Parris Glendening has pumped record amounts of money into school construction. The average is $250 million a year.

Of that, Washington County has gotten about $4.5 million a year, said Director of Facilities Dennis McGee.

That's smaller than the county's historical share, which has averaged about 2.5 percent of the state's total spending over the last 25 years, McGee said. If the money were handed to counties strictly based on student population, Washington County's fair share would be about $6.5 million a year, he said.

The county can't ask for the additional $2 million because it doesn't have $2 million in county matching money that would be required.

Tax not supported

It's for that reason that Delegation Chairman Del. Robert A. McKee has tried to keep the tax proposal alive by postponing a vote. McKee, R-Washington, argues that lawmakers should consider approving his compromise, a half-percent tax that would only be in effect for the final two years of the state's construction boom.

Because of a looming bill-filing deadline, McKee is likely to bring up the issue for a vote on Wednesday. It appears he is still virtually alone in his support for the tax.

Del. Sue Hecht, D-Frederick/Washington, said she would like to help the commissioners, whose job it would be to "sell the tax back home" if it passed the legislature.

"To me it's enabling legislation. We've elected the County Commissioners to do the local job," she said.

At the same time, she is disturbed that the business community hasn't taken a position on the tax.

"We need to hear from them," she said.

The Hagerstown-Washington County Chamber of Commerce did not mention the tax at a pre-legislative forum they hosted, even though business leaders have said education is one of their top priorities.

The Washington County Board of Education has also remained silent.

Four Washington County Board of Education members who came to speak with lawmakers in Annapolis last week were either unaware of the compromise proposal or unwilling to even discuss it.

They had more important things on their agenda, they said, such as opposing the expansion of collective bargaining for teachers.

Meanwhile, delegation members had nothing good to say about the transfer tax idea.

"I'm voting against the transfer tax. Period. I'm not supporting the transfer tax at all," said Sen. Donald F. Munson, R-Washington.

The tax would roll back everything the state has done in the last several years to reduce skyrocketing closing costs for homebuyers, he said.

Sen. Alex X. Mooney, R-Frederick/Washington, said he would vote against the tax proposal just as he voted against four Frederick County tax proposals last year.

"I think we should be reducing taxes, not raising them," he said.

The decision was tougher for Del. Christopher B. Shank, R-Washington.

"It's something I've thought long and hard about because I understand where the County Commissioners are coming from. I am not dismissing this request lightly," he said.

Shank believes the transfer tax would put an unfair burden on senior citizens who are downsizing, as well as young couples who are first-time homebuyers.

It also contradicts the city of Hagerstown's goal of increasing homeownership, he said.

"By increasing the bar, by raising this tax, I think that's counterproductive. I think our people in Washington County have been taxed enough," he said.

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