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Housing Authority must pay excise tax

October 15, 2003|by TARA REILLY

tarar@herald-mail.com

The Hagerstown Housing Authority will have to pay an excise tax totaling more than $350,000 to Washington County since the County Commissioners on Tuesday deadlocked over whether to waive it.

Commissioner John C. Munson made a motion to waive the tax for one part of the Gateway Crossing project being built in the West End of Hagerstown, which received a second from Commissioner James F. Kercheval.

But Commissioners Vice President William J. Wivell and Commissioner Doris J. Nipps voted against the motion, tying the vote at 2-2. Wivell said the motion died because it didn't receive the majority of the votes.

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Commissioners President Gregory I. Snook was not at the meeting.

Housing Authority Executive Director Ted Shankle asked for the waiver, saying that the project's budget was created before the commissioners considered and approved the excise tax, which is levied on new construction.

The commissioners passed the excise tax to pay for infrastructure and education construction projects, Nipps said.

Nipps said the tax should be levied on Gateway Crossing, saying it will end up adding children to West End schools.

"The money has got to be there to provide the service for these students ...," Nipps said.

Nipps, an employee of Habitat for Humanity, also said she could not support the waiver unless the commissioners waived the excise tax for other nonprofit groups that build low-income housing.

Shankle said that since the Housing Authority didn't anticipate the tax, which totals $352,405 for the entire project, paying it would be a financial burden. He added that state funds for the the project were cut.

The first phase of the $73 million housing project already received building approval, so the excise tax will apply to the second, third and fourth phases.

Munson said the tax should be waived on the second phase, and that a waiver on the third and fourth phases should be discussed when those units are nearing construction.

The Gateway Crossing project is intended to revitalize Hagerstown's West End, Shankle said. As part of the project, the 210-unit West View Homes public housing project was demolished.

Gateway Crossing will consist of rental and owned properties, Shankle said.

Kercheval said that since the 210 units were torn down and Gateway Crossing's first two phases total 188 housing units, the Housing Authority shouldn't have to pay the excise tax on the second phase.

He said the 188 replacement units wouldn't have a negative impact on the schools in the West End because 210 units were torn down, making it a near wash.

Nipps and Wivell said that if the commissioners approved the waiver for one nonprofit group, other nonprofit organizations would request the same consideration.

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