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Authority granted to collect new taxes

The Maryland General Assembly on Friday approved legislation that allows Washington County to implement real estate transfer an

The Maryland General Assembly on Friday approved legislation that allows Washington County to implement real estate transfer an

April 07, 2003|by LAURA ERNDE

laurae@herald-mail.com

The Maryland General Assembly gave final approval Friday to legislation giving Washington County the power to collect two new taxes.

None of the money will be earmarked for municipalities, including Hagerstown.

Local lawmakers had required Hagerstown officials to resolve a dispute with the Washington County Commissioners before they could share in the proceeds of the transfer and excise taxes.

At stake is a $625,000 state environmental grant that could expire June 30 unless the dispute is settled, said Del. Christopher B. Shank, R-Washington.

Hagerstown Mayor William M. Breichner said lawmakers should have put more pressure on the County Commissioners to accept a city-proposed compromise.

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"That's very disappointing that the delegation didn't think any more of the city of Hagerstown and the 36,000 people they're representing to give us more consideration," Breichner said.

Shank blamed the city for linking its dispute over a sewer flow transfer agreement with a disagreement over annexation policy.

He said lawmakers can revisit the issue of giving municipalities a share of the tax revenue next year.

Shank and other local lawmakers crafted the "Growth Management Act of 2003" to bring more than $5 million into county coffers based on a request from the Washington County Commissioners.

"I'm very pleased that we were able to get this landmark piece of legislation through," Shank said.

A proposed real estate transfer tax would be capped at .5 percent. A proposed excise tax would be limited to $1 per square foot on new construction.

The transfer tax would increase closing costs by as much as $750 on a $150,000 house. It would add $2,000 to the cost of building a 2,000-square-foot house.

Last fall, Shank campaigned against a transfer tax, saying it would unfairly punish retirees who were moving in order to downsize.

He said his concerns about the tax were addressed by changes that allow first-time home buyers and senior citizens to be exempt from the transfer tax.

"At the end of the day, we have to compromise," he said.

It was designed to require developers to help pay for the burden on government that their housing developments bring, he said.

The legislation require the county to spend at least $400,000 of the new tax revenues on farmland preservation. The rest could be used for school construction, public safety, transportation and debt reduction.

The legislation also allows Washington County government to offer a property tax credit for businesses that renovate buildings in urban areas.

Although the city will not receive the proceeds, city residents will benefit from county spending on schools and public safety, Shank said.

The legislation unanimously passed the House of Delegates on March 21 and unanimously passed the Senate on Friday.

Before the Washington County Commissioners can enact either of the taxes, Gov. Robert L. Ehrlich will have to sign the bill.

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