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Washington County needs a fair, flexible revenue source

February 08, 2005|By Brien Poffenberger

At last week's State of the County forum, Washington County Commissioners President Greg Snook outlined the commissioners' approach to funding the county's growth, focusing on an excise tax for both residential and commercial construction. The Chamber of Commerce is encouraged that the commissioners are having this conversation now. If we are not exactly ahead of the curve, we are not yet woefully behind it, either. The chamber supports the discussion of an excise tax to replace the current funding mechanism for our roads, schools and other infrastructure.

There is no lack of evidence that increased growth is coming our way, and yet, looking east, we have no good model of how to do it right. We do know that Washington County's strong economic base depends on finding an equitable way to leverage our growth in support of infrastructure critical to businesses.

The current fee structure on commercial construction has grown in reaction to development pressures and stop-gap funding requirements. The county currently has the authority to impose adequate public facilities ordinance (APFO) fees to ensure that development pays for increased strain on infrastructure. When first implemented, an area-specific approach worked, but increasingly the fees are failing to meet countywide funding needs. The commissioners have begun to look for other funding mechanisms, and, as the law requires, they have turned to the state delegation for authority from Annapolis.

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Beyond the APFO fees, the county currently has limited ability to levy an excise tax on both residential and nonresidential construction, and this is the starting point for the commissioners' discussion with the delegation. The commissioners hope to remove some limitations in the current excise tax law and restructure the formula used for residential construction. These changes would allow the county to impose the excise tax more evenly.

The chamber supports an overall restructuring of the county's revenue source, and we urge our state and local leaders to focus on several priorities. The authorizing legislation in Annapolis must give our local elected officials the latitude to meet the county's changing needs. Similarly, the mechanics of the commissioners' funding plan must be fair, predictable, and flexible. Infrastructure that benefits the whole community - local roads and schools - should be paid for by the whole community. Any combination of taxes and fees must have specific formulas that allow businesses to plan for both expansion and new construction. The county must have the flexibility to use the tax structure as an economic development tool, encouraging development of our target industries in our target areas. All of these priorities must be underpinned by a system of accountability, so officials and voters alike understand who controls the money and how it is spent.

Beyond issues vital to business planning, the chamber is also concerned about the county's growing shortage of affordable housing, an economic issue that threatens the availability of a viable work force. In imposing an excise tax on new residential units, the chamber urges the commissioners and delegation to apply a scale that does not discourage development of affordable housing.

To date, the County Commissioners and the delegation have been working through their options. The chamber does not endorse any specific tax or fee and looks forward to the continued discussion of a fair and flexible revenue plan.

Brien Poffenberger is president of the Hagerstown-Washington County Chamber of Commerce.

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