Advertisement

Excise tax change a gift to developers

June 29, 2008

The excise tax revision is complete. Developers can breathe a sigh of relief and pop the cork on the champagne. Even though our schools are overcrowded and our roads are in disrepair, developers will pay less for roads and schools than before the excise tax revision. Developers have never been required to pay for the full impact they have on our community.

This is why, in spite of record levels of new development, the schools and roads are in worse condition than at any time in recent memory. Not since the Ron Bowers era have we had a set of commissioners more willing to spend tax dollars to benefit developers.

In this article, I will highlight a few examples of the pro-developer bias and once again urge the commissioners to use our tax dollars for the benefit of all citizens, not just one segment of the business community.

Before the excise tax revision, a developer of a 2,000-square-froot house was required to pay a flat fee of $13,500 with 70 percent of this amount ($9,450) going for schools. Because all of our high schools are over capacity (except Hancock), a new classroom seat will be required for each new house built. This space costs between $30,000 and $50,000 per seat.

Advertisement

Under the newly revised excise plan, the developer of an identical 2,000 square foot house will pay only $3 per square foot for a total of $6,000 ($4,200 for schools). This leaves the taxpayers covering a whopping $25,000 for every house the developer builds. At these discount rates, the average-sized house would need to be 10,000 square feet to fully pay for the impact on the schools.

Under the revised excise tax plan, every new development, commercial or residential, will cost taxpayers through higher taxes and/or a reduced quality of life. Developers should be thankful for the tireless efforts of Del. Chris Shank and the acquiescence of virtually all of our elected officials for this excise tax revision. Developers of acre-eating, transportation-intensive, low-paying, warehouse jobs will now enjoy an excise tax of only $1 per square foot, ensuring that the road network will continue to deteriorate. Retail developers are celebrating, too, paying only $3 per square foot.

In another recent example of pro-developer largesse, the commissioners approved funding a multi million-dollar expansion of a road in the warehouse district rather than charge the developers the full cost. The intersection of Interstates 70 and 81 is the most valuable intersection in the mid-Atlantic region of the United States. Every time the price of fuel increases, this intersection becomes more valuable. This intersection is our golden goose and these commissioners are selling the eggs as if they were made of lead.

While there always seems to be a few million dollars available when a developer needs it, there is never enough money to fix the overcrowded and antiquated high schools in this county. In fact, these commissioners are using the current slowdown in the economy as an excuse to delay construction of a new high school. Of course, this logic does not apply to when a local developer needs to unload a white elephant downtown.

According to commissioners Aleshire, Barr and Kercheval, the purchase of the downtown building was "prudent and necessary" and not merely to save a local developer from a tough real estate market. While the pro-growth commissioners spend $4 million to purchase a building to be used some day in the future, they repeatedly put off spending any money to solve the current high school capacity crisis. Apparently, the commissioners do not believe that investing in quality schools is prudent or necessary.

While developers get their new roads subsidized by the taxpayers (sometimes years before they will be used), the taxpayers are told to accept second-rate tar and gravel patches on our roads rather than real repairs. These are the same roads being beat up by all the traffic from the excessive new development encouraged by these commissioners.

The current commissioners use a flawed circular logic to justify their pathological "pro-growth" ideology. They believe that the best use of your tax dollars is to encourage growth. This is how they do it.

First, the commissioners use tax dollars to provide incentives to developers (tax breaks, free roads and reduced sewer fees, etc). The commissioners then refuse to collect enough money from developers to pay for infrastructure (roads, schools etc.).

This leads to a funding shortfall ($11 million in 2007), and necessary infrastructure projects are put off into the future. Consequently, schools, roads and other infrastructure continue to deteriorate.

Failing to see a problem with this outcome, the pro-growth commissioners attempt to put out the fire with gasoline and proceed to encourage more development. We see this pattern on Robinwood Drive, on Sharpsburg Pike, on Maugans Avenue, on Eastern Boulevard and in many other developments.

Following several years of record tax revenue, Washington County should have some of the best roads and finest school facilities in the state.

Instead, many schools are old and in need of repair or replacement. The roads continue to get worse every year. These commissioners continue to follow the failed policies of the previous commissioners, who followed the failed policies of Montgomery and Frederick counties.

The excise tax revision became necessary because the commissioners gave developers huge discounts on school and road construction costs. Using the excise tax revision to increase the size of these developer discounts will not benefit the taxpayers of Washington County.

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

The Herald-Mail Articles
|
|
|