With some reluctant votes in favor, council passes real estate transfer tax Bill termed essential to finance land preservation, school construction

April 11, 1993|By Sherrie Ruhl | Sherrie Ruhl,Staff Writer

Harford's County Council president voted with a clothespin firmly clamped to his nose -- really.

L "I hate this tax. It's inequitable," said Jeffrey D. Wilson.

Then he voted for the tax on real estate transfers, saying he saw no alternative if the county was to proceed with a land-preservation plan.

The council shared his ambivalence but passed the tax, 4-3, Tuesday night. Earlier in the evening, the council unanimously passed the land-preservation bill, which the transfer tax will help finance.

A last-minute amendment to the land-preservation bill, to allow farmers to sell land easements for a lump sum rather than 20 annual payments, helped make the tax more palatable, supporters said.

Critics claim that the tax, whose proceeds will be split between land preservation and school construction, unfairly targets those buying and selling homes.

The tax, levied on all real estate transfers, will amount to 1 percent of a property's selling price, excluding the first $30,000 -- or about $700 on a $100,000 house.

"At least 65 percent of all of the homes sold in this county are to people who already live here and are trading up," said Robert S. Wagner, a District E Republican. He refused to vote for the transfer tax, despite what he called heavy lobbying from the county administration.

"Residents voted for the transfer tax referendum back in November thinking someone else was going to foot the bill. When they decide to sell their homes and realize they have to pay the transfer tax, this council will hear about it, and the voters will not be happy."

The council's vote left real estate agents and developers fuming. The tax, they said, will raise the price of homes in a county already facing a shortage of affordable housing.

"Holding your nose and passing legislation just because it's before you is an unacceptable way to deal with a problem," said James M. Martin, chairman of the legislative and political affairs committee for the Harford County Association of Realtors.

"The transfer tax was rushed through," Mr. Martin said. "We don't feel the council made an effort to look at alternative ways to fund these programs."

Theresa M. Pierno, a District C Democrat, disputed that claim. Voting for the transfer tax, she said that the council had looked for other options but found none.

"If we raise the property tax, that will hit homeowners year after year, not just when they buy a home," she said. "Raising the piggyback tax would affect everyone, but it also hurts everyone, including senior citizens and people struggling through tough economic times."

Council members Susan Heselton, a District A Republican, and Philip J. Barker, a District F Democrat, also voted for the tax.

Mrs. Pierno also said the council would be willing to listen to a proposal from real estate agents that would raise the exemption from the tax from $30,000 to $60,000 on a house's sale price.

But raising the exemption won't help first-time homebuyers who could be forced out of the market because of the tax, said Barry T. Glassman, a District D Republican.

"Young people move here from Baltimore County because they can't afford homes there," he said. "Where do our young people go? Do we send them across the river to Cecil?"

Joanne S. Parrott, a District B Republican, who also voted against the transfer tax, agreed and said senior citizens will also be hurt.

"Senior citizens are the fastest-growing population in the county," she said. "What happens to them when they want to sell their homes and trade down to something more manageable? They'll also have to pay this tax."

About 100 people attended the meeting. PTA members wore stickers attesting their support; other supporters, including farmers, passed out about three dozen helium-filled green balloons.

Proceeds from the transfer tax, which could raise $4 million to $5 million annually after its first year, would be split evenly between farmers who agree to not develop their land and school construction.

This year, the transfer tax will raise about $1.5 million because it -- won't be levied on real estate sales for which contracts are signed before July 1.

School board member George Lisby said he was overjoyed. "This is a relief," he said, after the meeting. "Harford schools will need about $88 million in construction funds between now and 1999, and about $64 million of that will come from the county. The transfer tax is critical to paying for these projects."

The school board had passed a resolution supporting the tax.

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