Excise tax clause blasted

Proposal would exempt 'elderly housing' from schools portion

Proposal would exempt 'elderly housing' from schools portion

April 12, 2006|by TARA REILLY


A provision in Washington County's excise tax that exempts "elderly housing" from the building excise tax drew the ire Tuesday of about a dozen residents who said the provision lets developers off the hook too easy.

The comments came during a public hearing held by the Washington County Commissioners on a number of proposed changes to the excise tax ordinance.

One of the changes would exempt "elderly housing" from the schools portion of the excise tax, which is about 70 percent of the tax, according to the proposal. It is now exempt from the entire tax, according to the existing ordinance.


Washington County defines elderly housing as housing built for those 55 and older. The tax is exempt under the restriction that children do not live in the houses.

Residents who attended the public hearing said there's no way for the county to enforce whether children are living in the houses and adding to school enrollments.

They also question how the county would collect the excise tax on elderly housing units whose status change to regular housing, and whether the county would take the homes of occupants who couldn't afford to pay the tax.

The majority of the people who spoke opposed the elderly housing exemption.

The excise tax, in part, charges a tax ranging from $13,000 to $31,000 on residential units, depending on the type and number of housing units. Revenue from the schools portion of the tax goes toward increasing capacity at schools affected by growth.

Allen E. Swope, of Citizens for the Protection of Washington County (CPWC), called the elderly housing provision a "major loophole being exploited by some developers."

"With our ever-increasing need for school construction and renovation, and with our property taxes increasing at a 5 percent annual rate, this kind of giveaway cannot be tolerated," Swope said. "This shortfall in missed revenue will fall on the shoulders of the taxpayer and not the developer to help build the additional school space."

He said CPWC recommends that the elderly housing exemption be removed from the ordinance.

"This developer-friendly tax exemption is a bucket of worms that never should be opened in the first place," Swope said. "If Washington County wants to give elderly a tax break, let's do it directly to the senior and not through the developer who will really be the one to reap the benefit."

Brian Kurtyka, an attorney representing developers, opposed the change that would exempt elderly housing from only the schools portion of the tax.

He said he thinks elderly housing should be exempt from the entire tax.

Developers also pay the excise tax on roads, public libraries, parks, public safety and other public services, which represent 30 percent of the tax.

Ted Shankle, executive director of the Hagerstown Housing Authority, and Jerry Bucey of Interfaith Housing Alliance in Frederick, Md., were concerned that the county's excise tax will make it difficult to build low-income and affordable housing in the county.

Resident Jim Laird, who belongs to CPWC but spoke on his own Tuesday, said with the elderly housing exemption, the county is basically trusting promises from developers that such housing would remain designated for those 55 and older who have no school-age children.

"It sounds like a salesman saying, 'Just trust me,'" Laird said.

Commissioner John C. Munson said after the meeting he supports lower housing costs for the elderly, but the exemption issue was difficult.

"If you go one way, it's wrong," he said. "If you go the other way, it's wrong."

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