Delegation to revise excise tax bill

March 10, 2005|by TAMELA BAKER

ANNAPOLIS - A proposal for revising the excise tax charged to new development in Washington County got additional fine-tuning Wednesday as the county's delegation to the Maryland General Assembly agreed to several requests from the county commissioners for changes.

The delegation has drafted a bill to let the county government change its method of calculating the tax. The bill is scheduled for a hearing next week in a House committee.

The bill allows the county to switch from a calculation based on square footage to a flat fee of up to $13,000 per unit for new residential development. The excise tax for commercial development would still be calculated based on size; the county would be authorized to charge up to $5 per square foot.


Wednesday's revisions include:

-- A change in the formula for use of the excise tax to let municipalities keep 28 percent of the taxes collected within their jurisdictions, while giving 72 percent of the taxes to the county for use on capital projects for schools, roads and libraries.

Municipalities may use their portion for roads, parks and recreation, public safety and agricultural land preservation.

-- Changing a requirement that the county earmark $1.8 million per year from federal, state and local sources to a requirement that the county dedicate a minimum of $1 million per year in local money for agricultural preservation.

Commissioners James Kercheval and William Wivell said if state and federal sources dried up, the county would have to come up with the full $1.8 million in local funds - money that would have to be cut from other projects.

Sen. Donald F. Munson, R-Washington, expressed concern about the county government's commitment to agricultural preservation. "It's a quality of life issue in our county," Munson said. "We don't want Washington County paved over."

Kercheval and Wivell said the county is serious about investing in preservation.

Kercheval said the county has not yet set a goal for how much should be invested in agricultural land preservation each year, but he and Wivell agreed that a $1 million requirement was reasonable.

-- Adjustment of a requirement for a school construction overview committee to review all capital projects to require the committee to review projects costing more than $2 million, and adding a 6-year sunset clause for the committee.

The delegation also agreed to a request from Hagerstown Mayor William Breichner to include language in the bill clarifying that municipalities could keep 28 percent of the excise tax charged to commercial development as well as residential.

And after hearing concerns from the Maryland Builders Association about a provision allowing the county to charge an open-ended surcharge on residential developments with more than 25 units, the legislators agreed to set the surcharge limit per unit at twice the limit for homes in smaller developments. That means the excise tax charged per unit in a large development could be up to $26,000.

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