Developer seeks exemption from excise tax revision

March 26, 2005|by TAMELA BAKER

ANNAPOLIS - The ongoing quest for a revision of Washington County's building excise tax took a new twist this week.

But this time it's not an issue between the County Commissioners and the Washington County Delegation to the General Assembly that is complicating legislative efforts to revise the tax.

Rather, a developer is attempting to amend the excise tax legislation to exempt any development that received even preliminary approval before Jan. 1 - an exemption the county calculates could involve up to 15,000 lots of record, and cost the county up to $200 million over time.

County officials have responded by threatening to halt development on those lots.

The county now calculates its excise tax based on the square footage of new construction. The tax is used to help pay for schools, roads and other infrastructure needs resulting from new development.


Pending legislation in the General Assembly would allow the county to charge a flat fee of up to $13,000 per unit for residential development.

Annapolis-based lobbyist Gerard Evans told The Herald-Mail on Friday that he was hired by Zenith Construction Company to draft the amendment.

Evans said the amendment would affect other developers as well.

Their contention, he said, is that it wouldn't be fair to charge the new tax to developers who already have their projects planned.

"There are about five or six projects that I know of" that would be affected, he said. Some of them have been planned since 2002, he added.

The amendment stipulates that the revision "does not apply to any development or proposed development in Washington County (including the city of Hagerstown or any other municipality therein) with respect to which a preliminary or final plat or a grading permit was approved by applicable governmental authorities prior to Jan. 1, 2005."

Zenith Construction officials could not be reached for comment Friday.

The Washington County Commissioners wrote to both chambers of the General Assembly on Thursday opposing such an amendment, although the amendment had not yet been introduced.

The letter, signed by Commissioners President Gregory I. Snook, said the amendment "would completely undermine the intent of our excise tax legislation and cost our county between $100 million and $200 million."

It says the legislation is designed to help fill funding shortfalls for needed schools, roads and other capital projects resulting from growth, "and make sure that the new construction on the thousands of lots of record in our county pay for the added impact they have on our schools and roads."

The amendment would exempt nearly all of the projected new development in the county, the letter says.

"Therefore, we would be forced to put a grinding stop to new development, as we would not have capacity in our schools or on our existing road system. This would include stopping many of the developments exempted by this amendment," the commissioners wrote.

Evans said he had contacted Sen. Donald F. Munson, R-Washington, to see whether Munson would sponsor the amendment. But Munson, who serves on the Senate Budget and Taxation Committee considering the bill, said Friday he would neither sponsor nor accept the amendment.

"I don't want this bill gutted," he said.

If Munson won't sponsor the amendment, Evans said he had found another legislator on the committee who would. Munson said it wasn't likely the committee would approve an amendment over a local legislator's objection.

The bill already has undergone several surgeries, spurring disagreements between lawmakers and commissioners that required some negotiating to iron out.

But this time, the commissioners and the legislators are united.

Delegation Chairman Christopher B. Shank said Friday that local lawmakers are "adamantly opposed" to the amendment.

"I think it's reprehensible that this individual is putting profits ahead of schoolchildren, and having the attitude that he should somehow be exempt from paying his own way," said Shank, R-Washington.

"We will be strenuously and vigorously fighting this amendment," he said.

Del. LeRoy Myers, R-Washington/Allegany, said he had heard that a large developer was trying to amend the excise tax bill, "but if his request is granted, it completely destroys the purpose of the bill."

A contractor himself, Myers said the delegation and county officials are trying to supply schools, roads and other needs associated with development. "Letting the new people coming into our county pay for it is the fairest way to do it." He said that between the delegation and the county commissioners, "lots of work" had gone into the bill.

"I will do all I can to keep the bill the way it is," Myers said.

Evans countered that there were other ways of handling development stresses.

"The more appropriate way of dealing with growth is through planning and zoning, not by trying to tax people out of their jurisdiction," he said.

Staff writer Andrew Schotz contributed to this story

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