Excise

WASHINGTON COUNTY andrews@herald-mail.com Three weeks before voting on a building excise tax ordinance, the Washington County Commissioners fielded questions on the plan Tuesday. The ordinance calls for a $13,000 tax on the construction of each single-family home. For a multifamily home, the tax would be $15,500. Under certain conditions, those taxes double for the 26th home - and all subsequent homes - in a subdivision in one fiscal year. The taxes are meant to help counterbalance new development on schools, roads, public safety and other government expenses.

tarar@herald-mail.com The Washington County Commissioners will discuss a recommendation today to set transfer and excise tax rates that would generate $2.4 million a year through fiscal year 2009. The Maryland General Assembly last month gave the County Commissioners the authority to implement the taxes on real estate transactions and new construction. The state law requires that $400,000 of the excise tax revenue go toward agricultural land preservation. The remaining $2 million may be used for school construction, public safety, transportation and debt reduction.

The Washington County Commissioners should reconsider their decision not to waive $350,000 in excise taxes for the Hagerstown Housing Authority. Not only is the county board's logic in levying the fee flawed, but doing so could make it more difficult for HHA to provide services to existing tenants. The idea behind the excise tax is sound - to have developers share in the cost of providing necessary services like streets and schools. But the HHA project for which the county is seeking is Gateway Crossing in Hagerstown's West End, a project which is replacing, among other dwellings, the West View Homes public housing project.

WASHINGTON COUNTY -- When the Washington County Commissioners recommended changes to the residential excise tax last year, they settled on a rate they said would keep revenues steady. So far this fiscal year, the tax, which is charged on new home construction, has come close to meeting that goal. In the first three months of fiscal 2009, which began July 1, the county collected $171,471 on permits taxed under the new $3-per-square-foot rate, according to county permit records.

A task force recommending a new Washington County excise-tax structure held its first meeting Wednesday. The task force set a meeting schedule and discussed the scope of its work, which will include recommending changes to the excise-tax rates and structure to the Washington County Commissioners by Sept. 30. "It's a daunting task, especially given the time frame, but we'll do what we were asked to do," said former county commissioner John Schnebly, the chairman of the task force.

Know more in 30 seconds The issue: A task force appointed to review Washington County's excise-tax structure held its first meeting Wednesday. What's new: Task force Chairman John Schnebly said the panel will begin its work by addressing exemptions in the current excise-tax structure that he and others said have been used as tax loopholes. What's next: The task force's next meeting is Wednesday at 4:30 p.m. in the Washington County Administration Annex building at 80 W. Baltimore St. HAGERSTOWN - A task force recommending a new Washington County excise-tax structure held its first meeting Wednesday.

Washington County's state lawmakers agreed Wednesday to file a bill to let the county change its excise-tax structure for one year. If the bill is approved, the county can lift its tax cap on new residential construction, which is $13,000 for single-family homes and $15,500 per unit for multi-family homes. The county would come up with a graduated fee system based on square footage, charging more for larger homes. The new fee structure would be in effect only for fiscal year 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.

ANNAPOLIS County officials and the Washington County Delegation to the Maryland General Assembly are at odds again on how to revise the enabling legislation that allows the county to charge excise taxes on new development. Revisions last year kept a bill to change the method of calculating the tax in limbo until the final moments of the legislative session. This year, the bill seeks authority for the county to exempt certain businesses from the tax. The tangle is over exempting existing businesses that want to expand.

After two years of revenue shortfalls in Washington County's excise tax, a task force created to suggest changes in the tax will present its final report to the county commissioners today. If adopted into law, the group's recommendations would result in lower excise taxes for many home builders but would also eliminate some of the exemptions included in the current excise tax ordinance. Under the recommendations, the excise tax on most new residential construction would change to $2 per square foot.

Raising taxes, particularly on gas, not the answer to woes To the editor: Gov. O'Malley and the Democrats in Annapolis have the same answer to all of our problems: tax increases. The governor claims that this gas tax increase is needed to build roads and bridges. However, he fails to mention that since becoming governor, he has raided more than $1 billion in funds from the Transportation Trust Fund, which have not been repaid.  The governor and his Democratic allies push for their new taxes, never mind the facts.

After hearing public testimony Tuesday afternoon, the Washington County Board of Commissioners voted to amend the county's excise tax ordinance, reducing the costs on new construction of residential and nonresidential retail properties. The amendment, approved by a unanimous 5-0 vote, authorizes the excise tax on residential construction to be lowered from $3 per square feet of habitable gross square footage to $1. Costs on new nonresidential retail construction also will be lowered from $3 per square foot to $1 per square foot on the first 15,000 square feet, and $3 per square foot thereafter.

Those of us who enjoy the foibles of local politics get positively giddy when we see the words “excise tax” on the Washington County Commissioners' agenda. Like a toddler with a can of Silly String, you just know something good is going to happen when they begin fiddling with tax policy. The county has always treated the tax like a go-kart that can be driven with precision through every sharp economic curve that comes along. They aren't alone. Through history, governments have tried to modify behavior through taxation, with mixed and often unpredictable results.

Since first gaining the authority to tax new development more than a decade ago, the Washington County Commissioners have not known quite what to do with the power. The excise tax, as it's known, was believed to be crucial back in the days when housing developments were blossoming across the county like May apples in the spring. But almost from the beginning, developers have pressured the commissioners into tax reductions and loopholes. This is what we might call a multigenerational county problem, meaning that county boards past and present have all been susceptible to developer lobbying.

The Washington County Board of Commissioners are scheduled to discuss at Tuesday's meeting whether to reduce or suspend the county's excise tax on new construction. The excise tax was meant to control growth and raise revenues for public infrastructure improvements, but under current economic conditions it is not meeting either goal and ought to be suspended, former county commissioner Ron Bowers told the Board of County Commissioners last week. Bowers told the commissioners that instead of controlling growth, the tax of $3 per square foot on residential and commercial development now “stymies growth” and is “not nearly as successful in it's secondary goal of increasing revenues.” The tax is $3 per square foot for new construction, however, a residential stimulus program is in place that exempts the first 3,000 square feet of a dwelling from the tax. That stimulus is due to expire on June 30, County Budget and Finance Director Debra Murray said.

Once again, the Washington County Commissioners have been tinkering with the local tax on development, this time exempting specified properties that change from one type of use to another. It might be a minor thing, but the commissioners have spent so much time whittling away at the excise tax since its inception that we wonder why they wanted it in the first place. Of course a different board was in place when the state lawmakers gave the county the authority to tax new development, but one way in which commissioners then and now have remained consistent is in the area of eroding the funding mechanism that is supposed to help pay for new schools, roads and utilities.

The  Washington County Board of Commissioners will hold a public hearing Tuesday at 1:30 p.m. in the county commissioners' meeting room at 100 W. Washington St. to consider amendments to the Building Excise Tax Ordinance. A proposed amendment would waive the $3-per-square-foot excise tax when the use of a nonresidential property changes from nonretail to retail. The county commissioners also have said the $1-per-square-foot fee should be waived when the property use changes the other way, from retail to nonretail.

Washington County is again extending a stimulus program for the construction of new homes. The Washington County Board of Commissioners agreed on Tuesday to continue the program for 12 more months past its expiration date of June 30, 2012. Under the program, the first $9,000 of excise tax on a residential building-permit application is waived, and each home builder will be allowed a maximum of 30 qualifying residential units. A memorandum from Jennifer M. Smith, the director of the county Division of Plan Review and Permitting, said the commissioners agreed in February 2011 to start the stimulus program “to address high unemployment in the County by providing an incentive to new construction.” According to the memo, 269 permits with excise-tax credits under the program were issued from March 2011 to April 2012.

Have you been having gas pains recently? Not to be personal, I was thinking about the pains at the pump when you fill up your vehicle. Gasoline prices are on the rise again. What are we going to do about it? Most of last year, the governor let it be known he favored a 15-cents-per-gallon increase in the Maryland excise tax spread over three years to refurbish our infrastructure. At least, that's what he says. The pain of a billion dollar or so shortfall in our budget makes any kind of tax attractive to Gov. O'Malley.