Real Estate Transfer Tax Could Pay For School Construction

Construction Committee Backs Financing Proposal

February 02, 1992|By Brian Sullam | Brian Sullam,Staff writer

County Executive Eileen M. Rehrmann's blue-ribbon committee on school construction has come to one conclusion: If the county is going to build the schools it needs, a new real estate property transfer tax should be enacted.

When she appointed a 26-member citizens panel last September to review the Board of Education's six-year constructionbudget, Rehrmann hoped that the panel might develop less-expensive alternatives to the board's ambitious program, which carries $108 million price.

"We found out that the county is getting a good bang for its buckin terms of school construction," said Raymond "Chick" Hamm, chairman of the committee.

"The real problem is that we don't have schools where we need them, and we need more money to build them."

Rehrmann, who was briefed on the report Friday afternoon, said the panel told her that population projections were on target, that there was little to be saved in altering construction methods and there were no "creative financing" techniques available to avoid spending the money the school board says it needs for school construction.

"They cameto the conclusion that there isn't any magic," said Rehrmann. "The real nut is how are we going to pay for the schools that are required?"

Part of the problem is that during the past decade a great deal of development took place without the necessary schools, she said. Now the time has come to pay for those schools.

When she heard the committee was going to recommend the transfer tax, she met with the county legislative delegation and told them it would be necessary to finance school construction. The delegation will be voting on the issuenext week, Rehrmann said.

In supporting the transfer tax, the panel said that such a levy, if enacted, should be dedicated to school construction.

A transfer tax of 0.5 percent, which would be imposedeach time a piece of real property is sold, would generate an estimated $2.45 million annually, the panel said.

"It is a lot better than raising the property tax or a recordation tax, which applies to all property," said Rehrmann.

In its report, the committee said the transfer tax is the closest link between those placing a burden on the school system and those who will bear the expense of providing relief.

Rehrmann said she agreed with the conclusion, saying that people moving into the county as well as those who move into other sections of the county are the people creating the demand for new schools.

"It is important to remember that it is a one-time tax," she said.

The committee also recommended that the money from the transfer tax be divided between paying for construction and service on school bond debt.

The panel concluded that the need for new school construction -- particularly at the elementary school level -- is acute.

At the moment, 10 public schools have enrollments that outstrip theircapacity.

Eight are elementary schools: Bel Air, Hickory, Homestead, Prospect Mill, Ring Factory, William Paca/Old Post, William S. James and Youth's Benefit. Others are a middle school, Bel Air, and a high school, C. Milton Wright.

By 1998, the number of overcrowded schools is projected to in

crease to 13.

At present, there are 30,962 students enrolled in Harford County schools. The Harford Board of Education projects that in six years, there will be 39,815 students in the system, a 32 percent increase.

In order to avoid the projected overcrowding and accommodate the expected increase in enrollments, the Board of Education called for the construction of 15 schools in its six-year capital budget.

Not all of the panels recommendations' focused on finances.

The panel said that future schools should be located on campuses that include elementary, middle and high schools as well as other community facilities as a way of maximizing county spending on land.

The panel also said the the county should consider buying and "landbanking" future school sites as a "a prudent use of tax dollars to minimize the costs of acquiring land for schools." It also suggested the county could sell off some of this land during inflationary periods and use the profits to pay for school construction.

To deal with the immediate pressure for elementary school rooms, the panel said the school board should consider construction 900-pupil elementary schools.

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