Tax trap in Harford County? Rehrmann's excise tax: Harford legislators can see the future -- in Howard County.

February 01, 1996

HARFORD COUNTY legislators are considering a proposal by their county executive, Eileen M. Rehrmann, to create an excise tax on construction that would help pay for road improvements. Ms. Rehrmann hopes the version is more palatable than one her county's General Assembly delegation shot down a few years ago. A similar tax in Howard County is the model for it, she says.

That being the case, Harford legislators may want to take a look across the Patapsco River. They would see that Howard's program is not responding the way Howard's executive promised his delegation a few years ago.

The Howard excise tax was born of a committee that Howard County Executive Charles I. Ecker formed in 1991. Including builders and growth foes, the group was charged with devising a compromise that would allow Howard to accommodate development. Its suggestion: An excise tax, based on the per-square foot size of new construction, to raise money for road improvements, to be matched 2-1 by county government. That seemed an equitable balance, because too often in these debates, people complain about the drawbacks of growth, but gloss over its benefits: Increased property value, greater retail and restaurant trade and other business potential, added jobs.

Now, however, Howard is reneging on its earlier plan: For fiscal year 1997, the county will have $20 million in its excise tax pot without county funds to match. So, Mr. Ecker is asking the legislature to lift the match requirement, and to allow the money to be used for debt service on larger state road projects. His excise tax has become simply an impact fee without strings. As opposed to the oft-employed impact fee, the Howard/Harford plan allows revenue to be spent on road improvements not necessarily near the projects footing the bill.

In fairness to Ms. Rehrmann and her fellow Harford legislators, her county's schools and roads have for the most part kept pace with growth as it became one of the 50 hottest markets in the U.S., according to American Demographics magazine. But growth has also raised Harford's ability to attract business. A fee that would hurt affordable housing and would be shouldered by a fragment of the population seems to fall back in the trap of creating political scapegoats to pay for the costs of growth.

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