The Washington County Commissioners voted 4-1 Tuesday to change the county's Building Excise Tax Ordinance by removing the doubling provision for fast-growing subdivisions.
Commissioners President Terry Baker cast the dissenting vote, saying he believed the doubling of the excise tax was a "valuable tool" when it was enacted several years ago and that he believes it remains so.
"It gave the county the ability to manage growth within a high-density area," Baker said after the vote.
"I don't believe it's having a positive effect at this time," Commissioner William B. McKinley said. In the current housing slump, he said, "there is no sprawl taking place."
Though he voted to get rid of the doubling tax, McKinley said the county should have it "readily available" should there be another residential building boom.
Commissioners Vice President John F. Barr and Commissioners Ruth Anne Callaham and Jeffrey A. Cline joined McKinley in voting to remove the doubling provision.
The doubling of the tax took effect when the number of housing units within a subdivision exceeded 25 within a fiscal year. The excise tax, used to fund schools, roads and other infrastructure, is $3 per square foot of habitable space in a dwelling, but doubles when the 26th home in a subdivision is built, County Administrator Gregory Murray said.
The doubling of the excise tax applies to the development, as opposed to a developer, Murray said during a break in the board's morning meetings. Several developers might work within a subdivision, but the doubling does not kick in until the 26th house is built, he said.
"Developers should be paying, and they should be paying substantially," said James Laird of Smithsburg, who spoke before the board's discussion of the tax. Laird said it would be "lame" on the board's part if it did away with the tax because it feared a lawsuit by developers.
Callaham said the issue of managing growth should be addressed through the Adequate Public Facilities Ordinance (APFO). She seconded McKinley's motion to remove the doubling tax for purposes of discussion, then introduced another motion to delay a vote until the APFO is updated.
Her motion to delay the vote died without a second.
Raising the excise tax from the current $3 per square foot, rather than having the doubling provision, would be another way for the county to collect revenue when another housing boom occurs, she said.
The vote came a week after the board voted to approve excise tax credits on new homes that began Tuesday and will run through Oct. 31. The stimulus program, similar to one passed by the board in late 2009 to spur home building, provides builders with a credit for the excise tax due on up to 3,000 square feet on homes and residential additions and each builder can apply that to as many as six new homes.