The Toll of Harford's Road Tax

January 28, 1994

The limits to local charter government seem annoyingly picayune at times. And annoyingly gigantic at others. Such is the case with the taxing authority of Harford and other counties, which requires the approval of a state General Assembly that doesn't know or care much about the matter.

State legislators mostly just vote on such bills according to the unanimous will of the affected county's delegation, unless there are broader legal implications. The dissent of a single delegation member is often sufficient to kill a bill, the assumption being that the county must be unified if it is to gain such precious permission.

Harford tried to get legislative sanction in 1990 to impose development-impact fees, or taxes, to pay for roads and facilities required by new construction and development. The bill passed the Senate but failed in the House of Delegates.

But Harford continued to assess developers for future road improvements, under a 1977 law that did not consider that mitigation fee as a tax.

This month, a state appeals panel struck down that county law, calling it an illegal tax that was not authorized by the General Assembly.

A class-action lawsuit that could cost Harford County billions of dollars was filed immediately thereafter, claiming at least 250 subdividers and developers had been illegally taxed by the county.

The lawsuit also challenges Harford's demand for right-of-way property from developers under the law, even if the road is not built, and the use of escrow accounts for improvement taxes that may never be spent for the intended work. An auditor's report to the County Council a year ago found unspent and undocumented escrow funds, collected years ago from developers for roads and facilities that had never been built.

Harford County plans to appeal the judicial decision in state court, then possibly to the Supreme Court if it loses. We hope that the county will prevail. Developers should help pay for the direct, immediate additional burden they impose on costly county infrastructure.

At the same time, Harford government should be more forceful in seeking taxing authority from the legislature instead of avoiding the issue. The county also faces a charge of illegal taxation in the trash tipping fee it imposed at the county landfill, in a dispute with the town of Bel Air.

Annoying as it may be, Harford must assure that it has General Assembly approval for taxes, or else it may jeopardize its financial integrity.

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