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Local lawmakers, commissioners, reach good growth-tax solution

February 02, 2003|By TIM ROWLAND

Washington Countians who follow local politics for some reason got their first glimmer of how the newly comprised Board of County Commissioners will govern over the next four years.

Despite the fact that all five commissioners are Republican, this panel shows signs of being more deeply divided than was the 3-2 Democrat majority of the past term.

The telltale vote this week was over a proposal from the Washington County legislative delegation that would allow commissioners to impose a small tax new construction and property transfers.

Taxes are perhaps the core issue for the majority of Washington County voters, so this was a good test. Commissioners John Munson and Bill Wivell voted against the proposal, while Jim Kercheval and Dori Nipps were in favor.

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That's going to be pattern - Kercheval and Nipps voting to nudge the county forward, Munson and Wivell putting on the brakes. The question has been, and will continue to be, in which camp will Commission President Greg Snook pitch his tent?

Snook is not terribly comfortable when all eyes are upon him, and even less so when it's a touchy subject like taxation. But in my view, Snook made the right decision in this instance when he sided with Kercheval and Nipps. It is also heartening that in the face of necessity, Snook can stand up and make a tough vote.

Also coming through for the county was Del. Chris Shank, who, fulfilling a campaign promise, cobbled together a sound piece of policy which will help pay for the service-needs created by growth, without over-stressing any particular tax-paying base.

Shank's plan will cause people moving into the county to pay a somewhat greater burden for the cost of new schools, paying down the debt created by expanded sewer service and protection of our open, scenic landscapes - the three areas in which citizens have expressed greatest concern of late.

The construction tax might be considered more equitable, because it specifically targets the new development that costs the county the most money for new services.

In contrast, the transfer tax is somewhat at odds with the mission of preserving farmland. Transfer taxes affect existing homes. From a policy standpoint, a stiff transfer tax by itself would financially discourage someone from, say, buying and fixing up a house in downtown Hagerstown, encouraging them instead to buy a raw piece of farmland and build new - the very thing that preservationists are trying to stop.

The problem, if you care to call it that, is that rapid growth, while expected, hasn't reached us yet. That means that the construction tax alone won't raise a meaningful amount of cash.

Shank would have the county enact a construction tax that will be on the books should runaway growth actually materialize, but in the meantime will allow the county to reap the greater revenue potential of the transfer tax.

Both Commissioners Munson and Wivell had reasonable grounds for dissent. Munson objects that the delegation is dictating taxation policy to the county, and historically he has a point. It's only been in the past four years or so that the delegation has aggressively tried to manipulate county policy.

Wivell too is correct when he says that a growth tax will shift the tax burden from the state level to the county level, and that it may discourage commissioners from seeking out budget cuts.

But Munson and Wivell are battling forces beyond their control. The county is dependent on the delegation for any type of new taxing authority, so it has to content itself with what state lawmakers are willing to hand down.

And true, the state is shifting financial burden to the county (just as the federal government is shifting financial burden to the state), but how, precisely, are five meager commissioners sitting in Western Maryland supposed to turn back the tide?

Schools, land preservation and the sewer debt all carry high costs. With the state cutting back on local aid, there is absolutely no way budget cuts are going to make up the difference.

In fact, without the construction/transfer taxing authority, county residents would conceivably be staring down the barrel of a property or income tax increase.

In the end, the county and state lawmakers have done the right thing. Since everyone in the county will benefit from schools, sewers and open space, perhaps it isn't completely fair to single out people who are building or buying homes (and the Realtors and homebuilders who serve them).

However, people who have lived here a long time have already paid a lot into the system, It's not unreasonable to ask newcomers to pony up a bit extra for the infrastructure that's already in place.

And as indicated, growth has not reached the point that we need an across-the-board property tax increase to pay for its effects. But if growth all of a sudden does take off as some predict, we will have a new-construction tax on the books to help us financially cope.

Nine of the 10 commissioners and lawmakers who approved the plan are Republicans, several of whom have years of anti-taxation credentials under their belts. It's hard to believe they would give these taxes their blessings without serious need.

Indeed, this tax tweaking will raise a little money for services, give commissioners a tool with which to regulate growth and provide enough financial wiggle room (hopefully) for the county to avoid across-the-board property or income taxes in a financially tough year. It's a smart move.

Tim Rowland is a Herald-Mail columnist.

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