Commissioners eye transfer tax

December 16, 2002|by TARA REILLY

WASHINGTON COUNTY - The Washington County Commissioners are considering resurrecting a request to state lawmakers for approval to impose a transfer tax on real estate transactions, an idea the local delegation shot down last year.

County officials say a 1 percent tax on real estate transactions could generate $1.2 million in revenue that could go toward capital projects for education, urban redevelopment, agricultural and historic preservation and other capital projects.

The commissioners will decide Tuesday whether to make the transfer tax part of their legislative agenda for the upcoming Maryland General Assembly session.


Commissioners President Gregory I. Snook said he thinks the local delegation will support at least one option of providing additional funds to the county, whether it be a transfer tax, excise tax or impact fees.

"I would suspect that they would probably support one of those ... because of limited revenue both by the state and the county," Snook said.

Snook has said he thinks funding from the state will be cut in the next fiscal year. The state is anticipating a $1.8 billion shortfall for the 2004 fiscal year, which begins on July 1, officials have said.

Commissioner John C. Munson said he knows the 2004 budget will be difficult to balance, but a transfer tax isn't the way to do it.

"I'm not in favor of any kind of taxes," Munson said. "I think people are taxed to death. That's not the answer. The answer is quit this crazy spending."

Munson said, however, he may consider supporting impact fees in light of anticipated local and state budget woes.

Impact fees are fees collected from developers on new construction. The fees help pay for the expanded public services needed because of growth.

The county has had the authority to collect impact fees since 1990, but it has not done so because of restrictions in place that govern where the fees can be collected and how the money can be spent.

The commissioners are considering asking lawmakers to remove the restrictions on where the fees can be levied so that the fees can be applied to the entire county.

Munson said he thinks charging impact fees is a more fair method of increasing revenue than imposing a transfer tax, which would be paid by buyers of local property.

Snook said he wanted to weigh the pros and cons of an excise tax before deciding on whether to support a county transfer tax.

An excise tax is also charged on new development, but it doesn't have the restrictions that impact fees do. An excise tax would give the commissioners more flexibility in spending the money, officials have said.

Commissioner William J. Wivell said he wouldn't mind having a transfer tax as an option if necessary, but that he generally doesn't support raising taxes.

The only way he'd consider imposing a transfer tax would be if the revenue it generates went toward reducing the county's $154 million total debt.

"I would support it if there were controls on spending as well," Wivell said. "I would rather see it go toward debt reduction rather than spending."

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