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Delegation notifies commissioners excise tax amendment to go forward

March 17, 2005|by TAMELA BAKER

tammyb@herald-mail.com

ANNAPOLIS - Sometimes it just pays to quit while you're ahead.

The Washington County Commissioners want to revise the excise tax levied on new developments to raise more money for school construction and infrastructure improvements needed to handle the county's rampant growth. So the county's delegation to the Maryland General Assembly agreed to draft enabling legislation to get the revision the commissioners want.

If approved by the full legislature, the revision would be effective July 1.

At the same time, delegation members said they'd heard from so many constituents concerned about escalating property tax assessments, they needed to get a handle on what the impact of those assessments would be. So they drafted a separate bill to set up a commission to study that.

And the Washington County Commissioners balked.

Such considerations were the function of the county government and not the delegation, the commissioners said.

So last week, delegation members decided that if the commissioners didn't want the study committee, they would draft an amendment to the excise tax bill forcing county officials to do it themselves.

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And while they were at it, delegation members tacked onto the amendment a proviso that county officials couldn't collect the new excise taxes until they report their findings to the delegation - a problem the county wouldn't have if the original proposal for a study commission went forward.

This week, the commissioners expressed fear that the provision would cost them millions in lost revenue until such a report was filed.

Not necessarily, said Delegation Chairman Christopher B. Shank.

The amendment, which was still in draft form and officially was included in the bill when it went to hearing Wednesday, sets a Dec. 31 deadline for the report. But Shank said that doesn't mean the county has to wait until the end of the year to file it.

Besides, he said, the delegation isn't asking the commissioners to do much more than state law already requires if they plan to exceed the constant yield - the tax rate that would produce the same revenue as the current year - when they set the tax rate for fiscal year 2006 at the end of this spring's budget process.

The fiscal year begins July 1.

Written notification


Lawmakers said they hadn't heard from any of the commissioners about the amendment before reading about the commissioners' reaction in the Herald-Mail on Wednesday. By Wednesday afternoon, they'd written a letter to the commissioners saying they intend to go forward with the amendment, which requires the county to analyze several issues:

· the impact of population growth on property assessments.

· the impact of property taxes on the availability of "workforce" housing, senior citizens and urban revitalization.

· the anticipated impact of the building excise tax on workforce housing.

· various means of encouraging development of workforce housing, such as tax credits, tiered tax rates, tax rebates and others.

· various option for reducing property tax burdens on county taxpayers.

It also requires a public hearing to allow residents to speak on those issues.

The delegation's letter says the purpose of the amendment "is not to exert authority over the Board of County Commissioners, but to ensure that this excise tax policy is implemented in a way that best serves the interests of all Washington County citizens."

The letter notes that it is estimated that the excise tax revision will raise an extra $57.3 million for the county over a six-year period. That estimate comes from legislative analyst Hiram L. Burch Jr., who prepared a fiscal report for lawmakers.

"This delegation has invested a tremendous amount of energy in crafting a bill," the letter says, "but we will not abrogate our responsibility to our constituents who are concerned with rapidly increasing assessments as well as the impact of this excise tax on the affordability of housing to the citizens of our county."

Lack of communication


Another issue frustrating delegation members is that the county didn't settle on a configuration for the excise tax until January, and were still tweaking it last week.

"This present impasse and lack of communication is the latest in a constant series of problems with how this bill has been presented to the delegation," the letter says. "While on the policy agenda for some time, the excise tax request was delivered to the delegation late in the process without thinking through all of the details

"The purpose of this amendment is to encourage a dialogue regarding property taxes and affordable housing between the public and the elected officials. It is our intention to proceed with this amendment to ensure that our mutual constituents are best served by this legislation."

All five of Washington County's members of the House of Delegates signed the letter. A companion excise tax bill has been filed in the Senate; it is scheduled for a hearing March 23 in the Budget and Taxation Committee.

"We're not down here to simply rubber stamp" what county officials request, Shank said Wednesday. Because county voters have twice rejected home rule, delegation members "have an obligation to be another set of eyes" on county proposals, he said.

Nevertheless, he said, the legislators are "quite willing to talk to them" about the property tax assessment study.

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