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County endorses Shank tax proposal

January 29, 2003|by TARA REILLY

tarar@herald-mail.com

The Washington County Commissioners agreed Tuesday to accept a proposal by Del. Chris Shank that would require the county to impose an excise tax on new construction before it could implement a transfer tax on real estate transactions.

County Commissioners President Gregory I. Snook said the commissioners came to a 3-2 consensus to accept Shank's proposal, because the county needs additional revenue in tight economic times.

Commissioners Vice President William J. Wivell and Commissioner John C. Munson opposed the proposal.

Munson said he did not support the proposal because the county would have to agree to both taxes.

"I don't like that," Munson said. "They shouldn't have told us, 'You take one you get the other.'"

Wivell said agreeing to the taxes would put a bigger financial burden on the county and less on the state. Imposing more taxes would make it easier for the county to not look at saving operational expenses within county government, he said.

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"The state will end up pushing off a lot of their funding responsibilities on the county..." Wivell said. "If we resort to raising taxes, it makes it easier for us not to look at operating efficiencies of the county."

Real estate agents oppose a transfer tax and builders oppose an excise tax, officials have said.

The commissioners last week asked the Washington County delegation to the Maryland General Assembly for the authority to charge a tax of up to 1 percent on real estate transfers, which would raise $6.4 million.

They did not ask for the authority to impose an excise tax at that time.

Snook said the county needs some type of additional revenue source. State budget cuts, unfunded mandates and aging schools have put a squeeze on the county's budget, officials have said.

"The county needs to get some additional money for school construction, ag land preservation and debt reduction," Snook said.

Snook said he will meet with the delegation today to hear more details about Shank's proposal.

Shank states in his proposal that a transfer tax of up to 1/2 percent would generate $3.5 million for fiscal year 2004. A minimum of $500,000 would have to be put toward the preservation of agricultural land.

An excise tax would allow the county to charge differing rates per square foot based on construction type, such as residential or commercial construction, according to Shank's proposal. The county also would be able to charge rates per square foot based on residential housing type and zoning classification.

The tax would apply to properties inside the municipalities of Washington County.

Shank has said a transfer tax does not target people moving into the county to help pay for growth. An excise tax, because it's charged on new construction, is one way to ensure fairness, he said.

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