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Local officials not ready to agree on new tax plan

December 18, 2002

Facing the likelihood of a reduction in state aid and the need to increase spending to comply with the federal "No Child Left Behind" law, the Washington County government will try again to get authority to impose a real estate transfer tax.

Given the differing views of all involved, it's a long shot. The county may have to suffer through a lean year in 2003 before all can agree on a solution.

The idea of the 1 percent transfer tax first surfaced in March of 2000, with the presentation of the county's fiscal 2001 budget. County Attorney Richard Douglas told the county board it had authority to impose such a tax, which was expected to raise $1.2 million. But by September of that year the commissioners found they needed the Maryland General Assembly's approval.

In November of that year, the idea got a cool reception from the delegation, with Del. Chris Shank, R-Washington, opposing it during a meeting between state lawmakers and the commissioners.

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In February 2001, Shank led the vote to kill the idea, saying impact fees were a better way to go. Later, after finding out how tough impact fees are to administer, Shank supported an excise tax on new construction.

In the end, the delegation couldn't agree and rejected all proposals. The commissioners were sufficiently discouraged that they decided not to ask for such help again during the 2002 session.

Since Shank campaigned against the idea of a transfer tax in 2002, he will probably oppose it again. Excise taxes would affect new commercial construction of the kind that helps with local tax revenue, so we don't see anyone backing that. And impact fees are have been opposed by the local development community and those in the building trades for more than 10 years.

As the federal government drops a big educational mandate on local systems and provides just 7 percent of the cash needed to make it happen, the easiest thing to do will be nothing. We hope we're wrong, but we feel it will take a little pain before the county decides it needs some fiscal medicine.

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