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Taxes benefit developers, not us

July 22, 2007|By JOE LANE

In Washington County, the effects of out-of-control development are hitting the taxpayers hard. In spite of record tax revenue from existing taxpayers, the county is short millions of dollars for the schools and roads in this county. There is a $12 million school-construction shortfall. The Edgewood/ Dual Highway project is now over budget at $14 million and counting.

Maugans Avenue was underestimated by millions and then struck by a sinkhole where more taxpayer dollars fell. The landfill will be full of construction debris decades ahead of schedule. Each one of these problems was caused by the pro-developer bias that characterizes the past and it seems the current County Commissioners.

In this article, I will show how these problems "slipped under the radar" and again recommend that the commissioners begin to charge developers "full fare."

Enough time has passed since these new commissioners have taken office to know that dealing with runaway development is not a priority. At this point, I cannot think of a single thing they have done to address the problem. In the grand tradition of Washington County Commissioners, they agreed to punt their elected responsibilities to the UGA committee (for land use) and the excise tax committee (for taxation). While a few excellent appointments were made to these committees, they are stacked with large numerical majorities representing developer interests.

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Last year the county collected a record amount of tax revenue due to rising assessments. This should leave this county flush with cash to build schools, fix roads and still have money left over for a tax cut or new service. Instead, we have record shortfalls and now the county has voted (3-2) to go into record debt. Developers are taking this county for a big ride.

If development paid for itself, why are the taxpayers covering a $12 million shortfall in school construction dollars? The fact is, every new house built costs an average of $39,000 just for the schools. The county only collects about $10,000 per house, leaving the taxpayer covering the remaining $29,000 per new house. This means the taxpayer gets stuck with $29 million in school construction costs for every 1,000 new houses. Let's not forget, there are roads, police, fire, libraries etc. Developers are not pulling their weight here either. This is where the record tax revenue is going.

Unfortunately, losing $29,000 per house is the best-case scenario. The commissioners currently exempt "elderly housing" and "workforce housing" from paying for schools. There is absolutely no evidence that housing exempted from the excise tax costs less than other housing. Virtually every house exempted from the excise tax sold for full market value and not a penny less and certainly not $15,000 less. This ridiculous exemption policy must end.

Maugans Avenue is another great example of developers getting a free ride. When commercial development was proposed in the Maugans Avenue corridor, the Economic Development Commission (EDC) stepped in to lobby the commissioners to reduce the road fees for commercial development by millions of dollars. Now as the project moves forward, we find a multi-million dollar shortfall. Thanks EDC. Now go find us some low-paying warehouse jobs.

Of course the Edgewood/ Dual Highway "Band-Aid" is millions over budget and counting. Now at $14 million, it is just a small fraction of the money needed for the build-out of Robinwood. If the county/city/state cannot even afford the "Band-Aid" and the county continues to give developers a discount, it is clear that this will not end well.

Excessive development has less obvious consequences as well. The taxpayers were told the landfill would have an 80-year lifespan. Now they are saying it will be 20 years. What happened on the way from 80 years to 20 years? Development happened. Bargain tipping fees happened. The landfill is a valuable resource. It should not be sold at bargain-basement prices to developers, as it is now.

Every year, landfill space becomes more valuable. Why sell landfill space for $40 per ton this year when it will be worth $80 per ton in five years? The value of landfill space increases much faster than inflation. Higher tipping fees encourage recycling. Raise the fees. It's a no-brainer.

It seems that most departments assigned to assess the costs of growth (roads, sewer, planning, landfill) consistently underestimate the costs of development. Why does the perspective of a few developers carry more weight than the large number of taxpayers who do not want to subsidize development? Are these people competent? This is now a multi-million dollar question.

Commissioners, the excise tax cap has been lifted. What are you waiting for? I'm sure the developers are happy this has been punted to a committee. If the committee moves slowly enough, the one-year sunset clause in the legislation will reinstate the tax cap. Then what? From my perspective, it looks like a plan hatched by developers, the delegation and the commissioners to make sure that the status quo will stay in place for at least two years. Even if the county slows down new development to 1,000 houses per year, taxpayers will lose $20 million to $40 million in school construction money over this time period.

When the balance sheet starts hemorrhaging red, it is past time to act. Developers should pay for the impact they have on this community. I would like the record amount of taxes I paid this year to increase the quality of life in Washington County, not increase the size of some developers' bank accounts.

Joe Lane is a Smithsburg resident who writes for The Herald-Mail.

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