Recordation tax bill considered to let counties collect revenue

January 29, 1995|By Amy L. Miller | Amy L. Miller,Sun Staff Writer

During one General Assembly committee session Friday, Sen. Larry E. Haines proposed bills that would both increase and shrink local tax bases.

One proposal would allow counties to collect recordation taxes, rather than allowing the Circuit Court clerk to do it; the other would exempt improvements required by the Americans With Disabilities Act (ADA) from being added to a company's property assessment.

"Unfortunately, I have to be on the other side of the table from Senator Haines on this issue," said Michael Sanderson of the Maryland Association of Counties as he spoke against the property tax exemption.

Moments earlier, Mr. Sanderson enthusiastically supported the Westminster senator's recordation tax bill because it would increase the amount of money going to local governments.

In most counties, recordation taxes are local revenue collected by the Circuit Court clerk. The clerk takes 3 percent to 5 percent as a processing fee before giving it to the local jurisdiction.

Carroll County, which collected $4 million to $5 million in recordation taxes last year, paid $250,000 in fees last year, according to county Comptroller Gene Curfman.

"I may be able to do it with existing staff," Mr. Curfman said. "Even if I have to add one person, I can do it more cheaply."

One position at that level with benefits would cost the county between $30,000 and $32,000 a year, he said.

"It makes a whole lot of sense," Mr. Sanderson said Friday in support of the recordation tax collection bill. "This is a local revenue to be used for local purposes.

"This situation was created by an old system that is no longer in place."

Most counties have the staff in place to collect their own recordation taxes, Mr. Haines said. Prince George's County already has been collecting the tax for itself since 1968, when the General Assembly passed enabling legislation.

The only opposition to the bill came from Maryland's Department of Budget and Fiscal Planning, which said the state would lose $4.6 million that it uses to run the Circuit Court offices if the bill is passed.

But Sen. John A. Cade, a Republican from Anne Arundel County, noted that clerks already charge a recordation fee that covers the clerical costs of recording a deed.

"There's no collation between the actual cost and the tax," he said.

Committee Chairwoman Barbara A. Hoffman, who represents Baltimore County and Baltimore City, said because the bill passed both houses of the legislature in 1992, it was more likely to be accepted again.

It was vetoed by former Gov. William Donald Schaefer.

Mr. Haines' other proposal, which would exempt improvements made in compliance of ADA from property taxes, was not looked upon quite as favorably by the committee.

Mr. Haines and three representatives of the building industry argued that the legislation would be an incentive for commercial property owners to comply with, and perhaps even exceed, ADA requirements.

But Mr. Cade said that commercial properties are assessed according to their ability to produce income, not on the basis of improvements.

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