Development taxes much higher than Lane suggests

October 19, 2003|by William Wivell

A recent letter to the editor by Joe Lane of Smithsburg led readers to believe that developers (home buyers) in Washington County would only be required to pay approximately $1,300 in fees per new home being built, while our counterparts in Frederick County are paying close to $17,000. While it is difficult to measure an exact dollar amount per residence, I do not believe Lane's comparison is accurate.

Fees in which a new home buyer in Washington County would be expected to pay today include: permits and inspections fees, recordation tax, transfer tax, excise tax, allocation fees for water and sewer if on a public system, and other requirements if on a private well and septic, and Adequate Public Facilities Ordinance (APFO) requirements for roads and schools. In addition, the developer would incur costs that could include agricultural transfer tax and development, engineering and review fees.

For fiscal year 2004, Washington County budget estimates include the following: Permits and inspections fees - $675,000; recordation tax at the rate of $3.80 per $500 of consideration - $4.5 million on residential property; transfer tax at the rate of 1/2 of 1 percent of value - $1.7 million; excise tax of $0.25 to $1.00 per square foot of finished space - $3.4 million (full implementation). These costs total $10,275,000. Dividing this total by the 858 residential (new) building permits issued in calendar year 2002 (results appear similar for year 2003) produces a result of approximately $11,975 per residential housing unit.


Allocation fees for county full service water customers are imposed at $2,275 per equivalent dwelling unit (house), and allocation fees for county sewer service customers are $3,500. The subtotal per housing unit is $5,775.

The county does not have authority to impose impact fees, but does have the authority to impose fees under the APFO. These fees for road and school requirements would be in addition to the above fees. The commissioners have recently held several workshops to address deficiencies in the APFO and have asked staff to develop a draft document scheduled for public hearing on Oct. 27. These changes include: The inclusion of full-day kindergarten and pre-k, where appropriate, in the formula for school capacity; identifying school capacity at 85 percent of the state-rated capacity (approximately 21 students per classroom) and requiring payment toward school capacity once a school reaches this threshold; limiting the issuance of and phasing building permits once the capacity reaches 100 percent; using a per-pupil yield of .41 students per household, and application of these ratios to actual costs per square foot of school construction. These changes alone not only place further restrictions on development, but could also result in a required payment of approximately $6,500 ($138 per square foot at 115 square feet per student at .41) per home toward the cost of school construction. In addition, the commissioners are addressing road capacity issues that recently have resulted in assessments of $5,600 per home, depending on the area, toward road construction costs. The subtotal per housing unit is $12,100.

The total of the above-mentioned items expressed on a per housing unit basis (and they will vary depending on the circumstances of each situation) is approximately $29,850, slightly higher than the $1,300 Lane would have you believe is the price of membership to be a county resident.

Other taxes and fees, such as the agricultural transfer tax ($435,000 annually), development fees ($90,000 annually) and engineering and review fees ($275,000 annually) are difficult to place on a per-unit basis and are not included in the above estimates.

In his editorial, Lane also combines funds which are provided by federal and state sources and attempts to mislead the reader into believing that these costs are purely local costs.

It might also be noted that Lane quietly enjoys the peace and tranquility of his home in a non-urban growth area, and neither he nor I were required to pay anything close to the fees being requested of new homeowners in today's market. Furthermore, if we were to apply Lane's philosophy of limiting construction in non-UGA areas one step further, his house would have never been allowed to be built.

And while we are comparing occupations Mr. Lane, I understand you are a school teacher. I certainly hope mathematics is not your specialty, because the numbers in your recent editorial simply do not add.

William Wivell is Vice President of the Washington County Commissioners.

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