Reject Harford's Transfer Tax

April 05, 1993

The Harford County Council should choose the correct, though more difficult, course tomorrow and turn down the proposed 1 percent transfer tax on real estate sales.

The tax is earmarked for building new schools and preserving the county's vanishing farmland, two programs that we strongly support. Harford's neighbor counties already have such a property transfer tax, so it would seem harmless enough.

The problem is that the cost of these countywide amenities should be paid for by all Harford citizens, not just by those who buy or sell property. A tiny increase in the property tax rate would quickly generate the $4 million or so that the transfer tax would produce. The county could also follow the lead of other Maryland counties and raise its piggyback rate on the state income tax.

Neither of these general tax levies is popular with the county administration, primarily because of the political symbolism of raising the general tax rates. Politicians naturally prefer to impose taxes on "special interests," instead of on the broader span of the electorate.

The property transfer tax would mostly affect newcomers to Harford County, an easy target for politicians. But all who buy or sell property, including older residents "trading down," would also pay.

If the county wants to enact a 1 percent transfer tax for the general welfare, let it do so. That tax would have a small impact on Harford's reputation for affordable housing, which is one of the factors fostering economic development here. School construction and agricultural preservation should be funded by the county's capital budget.

Unfortunately, the transfer tax was pre-selected and pre-sold by politicians. Harford officials chose that tax more than a year ago as their preferred means to fund the public purchase of farm development rights and preserve dwindling farmland. School construction was added to make the tax more attractive.

The General Assembly passed a law allowing the Harford transfer tax last spring. Harford voters then approved a farm-rights payment system. The transfer tax was mentioned on that county ballot question, but the referendum was not on the tax.

The Rural Plan has been passed, but it needs funding and a system to create and transfer development rights of farms. Letting farmers sell their rights on the open market, without county spending, would be another feasible alternative to this inequitable transfer tax proposal.

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