Eastern Shore tax fight heats up

Coalition attempts to limit increases in Wicomico County

`Future would be scary'

October 19, 2000|By Chris Guy | Chris Guy,SUN STAFF

SALISBURY - All summer and into the fall, there's been only one story in Wicomico County - taxes.

Three weeks before the Nov. 7 election, the debate over the county's first real estate transfer tax and a whopping 46-cent increase in the property tax rate approved June 1 is dividing public opinion like nothing else in the Eastern Shore's most-populous county.

First came VOICE (Voters Opposing Increased County/City Expenditures), a furious and effective band of tax rebels. Led by the local real estate industry, volunteers gathered nearly 18,000 petition signatures (in a county with about 41,000 registered voters) to force two referendums onto the ballot - to repeal the transfer tax and to impose a 2 percent annual cap on future county spending.

In the past month, a coalition of teachers, civil rights groups, firefighters, PTA groups, students and public employees has put together its own grass-roots campaign. In "fact sheet" handouts, radio spots and at every conceivable public forum, they have warned of dire and permanent consequences for schools, public safety and other vital services.

Leaders on both sides agree that it was the size of the property tax increase that touched a nerve in the county. With a population of less than 80,000, Wicomico's $2.71 property tax rate is now the fourth-highest in Maryland, ranking behind Baltimore City, Baltimore and Harford counties.

County council members say they expected protest when they raised taxes, but they blame previous lawmakers for failing to impose incremental increases to keep pace with development of the past 10 to 15 years.

The 1 percent real estate transfer tax, they say, is a modest step to help raise money for schools in a county that does not have an adequate public facilities ordinance or impact fees to help cover the costs of growth.

"The first year I came into office six years ago, I proposed a 26-cent property tax increase; it was that bad even then," said council president L. Russell Molnar, a poultry grower from Pittsville. "This year, we started talking about a tax increase in March. We made that tough decision because the public was telling us they wanted enhanced services."

The council is talking about a moratorium on development if voters approve the referendums. The sheriff says he's lost 50 deputies to higher-paying jobs with other agencies since 1992. If the revenue cap is approved, he would have to cut deputies who are stationed in county schools.

The county's librarian says services would be cut. School officials worry how they would increase pay for teachers or how they could make up $1.8 million in transfer tax money that's slated to pay off debt for construction projects.

Referendum opponents have filed an 11th-hour lawsuit, noting the failure of VOICE to file a financial disclosure report when petitions were delivered to the county elections office. The oversight wasn't discovered by elections officials until last week, nearly two months after the petitions were certified.

Robert B. Taylor, who is representing referendum opponents, says the case must be settled in circuit court or resolved through an emergency appeal to a state appellate court in time for referendum items to be stricken from ballots if the courts rule against VOICE. A hearing has been scheduled for Oct. 25.

Real estate broker Donald L. Coffin, who spearheaded the VOICE campaign, says the threatened lawsuit is the last hope for referendum opponents who know that public sentiment is against them, but that even if proponents lose in court, they will call for a special election.

"One way or another, people will get to vote on this," Coffin says.

"It speaks for itself for any organization to try and use a technicality to deny the democratic process. We followed what we were told was the proper procedure. This is a process that thousands of people have participated in."

Coffin and other referendum supporters point to the $11 million increase in this year's $93 million budget as proof that county spending is out of control.

"If it had been just the transfer tax and a 10 or 12 percent property tax increase, this organization would never have been formed," said Ann B. Suthowski, a VOICE leader who failed in a bid for a county council seat in 1998. "This is what you'd call the silent majority, and they're tired of arrogance in county government."

The fear for council president Molinar and others who oppose the referendums is also the benefit seen by Coffin and other VOICE members - that the plan to limit county revenue increases to 2 percent a year or the rate of inflation, whichever was lower, would force a gradual reduction in the property tax rate.

As new development occurred and real estate taxes yielded more revenue, the county inevitably would have to lower the property tax rate to keep annual revenue under the cap.

"The future would be scary with a revenue cap," says Rita Fletcher, who heads Wicomico's teachers' association and is one of two teachers who filed the lawsuit to stop the referendum. "It's not hard to figure out that we won't be able to use growth to pay for new services. I hope there are enough people in Wicomico County who care about the future, not just how much they have in their wallets today."

Another worry for referendum opponents is that, once passed, the revenue cap would be difficult to overturn.

In Anne Arundel County, one of three Maryland counties with tax or revenue caps, reformers failed to get enough signatures to push the issue on the ballot this year.

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