Let's look hard before we leap County Chamber of Commerce addresses the tax cap

Michael J. Chesser

October 01, 1990|By Michael J. Chesser

MORE THAN 16,000 Baltimore County residents sent a strong message to county officials this summer. Whatever position you take on the tax cap referendum issue, I think you will agree that their message was indicative of at least three things:

* The frustration of taxpayers over continually increasing property taxes;

* The general lack of knowledge of those same taxpayers about what it costs to provide the services they expect to receive from the county; and . . .

* The growing ability of consumer groups to make themselves heard and to influence policy in our community.

The chamber has expressed concern over the proposed tax cap. It was promulgated without a comprehensive review of how the county spends its money. It proposed to tighten revenues without any consideration for corresponding cutbacks in services or implementation of new taxes to make up for the shortfall.

The chamber favors a different approach. We believe that any change in the tax structure or county spending must be based on a firm foundation of understanding. As a result, we support the concept of a spending affordability committee as proposed by County Executive Dennis Rasmussen.

Legislation creating the concept of a spending affordability committee was passed by the County Council last spring. The committee will be responsible, in part, for linking increases in spending to some measurement of affordability. We're convinced that this is the more appropriate means to any change in tax policy.

However, the tax cap proposal still is a possibility. And we believe the community needs to be aware of the consequences of the proposal.

The Aug. 6 issue of U.S. News & World Report, in an article on tax revolts, said that many local governments are telling builders "that if they want permission to construct housing subdivisions or commercial complexes, they must absorb the expenses that in pre-revolt days had been the province of the public sector."

On the other hand, the magazine noted, builders warn that these impact fees "will drive housing costs up by as much as $6,000 per home in most areas. That could easily squeeze more first-time buyers out of the market and ultimately stifle new construction." The article did not touch on the ripple effect of reduced construction, meaning that as fewer houses and office buildings are built, bricklayers, architects, all types of construction workers, find themselves with less and less work. That can translate into higher unemployment and fewer purchases made at local businesses.

The magazine also pointed out that some municipalities' attempts to "escape reliance on the property tax" backfire. It cited the Harris County Tollroad Authority, which runs a two-year-old, two-road system in Houston. "Despite the rosiest of ridership projections, the highway network now is facing an annual deficit of $20 million for the next decade. Since the county guaranteed the road's construction debt in the early '80s, the shortfall will have to be made up through property tax revenues."

A couple of other examples of alternatives being considered around the country include a move by Fort Collins, Colo., to redefine its streets as public utilities so as to be able to require residents to pay a fee for roadway use. Chicago has decided to implement a new tax on college students' tuitions.

And Massachusetts recently implemented legislation which extends the state's 5 percent sales tax to 600 additional service businesses, "including fortune-telling and baby-shoe bronzing."

What is obvious in all of the above examples is that while they are attempts to move away from reliance on the property tax, they eventually fall on the backs of the taxpayer in the form of higher costs.

We believe the more equitable and intelligent approach is the one offered by the spending affordability committee. We need to look before we leap.

Michael J. Chesser is president of the Baltimore County Chamber of Commerce.

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