Md. legislators seem to waver on transfer tax

Proposed increase would help build schools

Vote expected this week

Real estate brokers remain opposed to plan

Howard County

February 09, 2003|By Larry Carson | Larry Carson,SUN STAFF

Howard County legislators appear to be squirming at the idea of voting to increase the county's real estate transfer tax to raise $215 million for school construction, preferring instead to have the county government raise the money by increasing taxes it controls.

The legislators are expected to vote on County Executive James N. Robey's proposed transfer tax increase this week.

Real estate brokers, the only organized opponents of the increase, have suggested that the county raise the money for schools through an income tax or other local tax increase. Some legislators are voicing similar sentiments.

"Most people just don't want to raise taxes. Most people would be more comfortable having Robey raise taxes rather than the delegation raise taxes," said the House delegation chairman, Del. Frank Turner, a Columbia Democrat.

Robey wants the legislators to approve an increase in the state transfer tax for Howard County from 1 percent to 1.5 percent and said he will use the revenues as a dedicated fund to finance borrowing $215 million for school construction over eight years, and then pay off the debt.

Some who are uncomfortable with the idea suggested an enabling bill instead - a measure that would give Robey and the County Council the power to adjust the transfer tax rate.

State Sen. Robert H. Kittleman, a Republican, suggested a commission to study tax alternatives.

"I think a lot of people jumped on Robey's proposal without thinking if it's the best way," he said.

"Frankly, I don't know that we here in the state delegation should be deciding what taxes should be raised for the county," said Democratic Del. Neil Quinter, who in December said he wanted all-day kindergarten three years earlier than the state requires.

Demands for new schools are surging as state school construction funding dwindles, and the county needs 80 new classrooms for all-day kindergarten by 2007.

With $87 million requested for schools next year and $112 million for 2005, Robey and Raymond S. Wacks, county budget director, have warned that they will have no money for other needs, such as road repaving, bridge and storm-water facilities, building maintenance and a police-fire training center.

But despite weeks of lobbying from both sides and a well-attended public hearing Thursday night in Ellicott City, the legislators seem unwilling to take a position despite broad support for the proposal.

"I'm going to wait for the discussion and the work session," said Republican Del. Gail H. Bates.

"I'm just waiting to see how it all plays out," said freshman Del. Steve J. DeBoy Sr., a Catonsville Democrat who represents part of Elkridge.

And several rejected the notion - while worrying about the public's perception - that voting against Robey's plan would mean they were not for good schools

"It's not a litmus test. This [transfer tax] is one avenue, one tool. The county has another tool," Republican state Sen. Sandra B. Schrader told Bill Neault, the final speaker at the nearly four-hour hearing.

"I don't question for one minute that there's a real need there," said Del. Elizabeth Bobo, a Democrat and former county executive who, like Democratic state Sen. Edward J. Kasemeyer, said she is not afraid to raise taxes.

But she is troubled by seemingly endless school crowding problems that have bedeviled Howard officials for 25 years, especially the notion that more children are coming to Howard schools from the sale of existing homes than from new ones.

"My common sense tells me that is not possible," Bobo said in disbelief. She wants some of the county excise taxes that developers pay for roads to go to schools and she does not want lower-income residents hit with tax increases. "I'm not a definite `no.' I want to see more," she said.

Kasemeyer said that "philosophically, I believe it should be a wider-based form of taxation," but he has not decided how to vote.

He and several others said they would have liked to have been consulted before Robey recommended the transfer tax - "a little bit of inclusion."

Quinter noted another objection that real estate brokers raised - the transfer tax is not reliable, and revenue has declined several times in the past dozen years.

Wacks conceded the downturns, but he said his revenue estimates are conservative enough to account for that, and "over time it [revenues] will bear out."

All the opposition to Robey's plan at the hearing came from the real estate industry. A much larger group of speakers - including parents, school officials, union leaders and advocates for Howard Community College, libraries, a builder and even one Realtor - supported Robey's plan. Kittleman estimated the margin of supporters vs. opponents at 2 to 1.

One speaker at the hearing said he makes a distinction between state and county needs.

Brooke Schumm said he is a Republican and father of three who supported Republican Gov. Robert L. Ehrlich Jr. last year, but felt differently about the county executive contest.

"No way I'd back Steve Adler," the Republican who ran against Robey, a Democrat, for Howard County executive, Schumm said, because Adler promised not to increase taxes. With Howard's schools so crowded - including Northfield Elementary, where two of Schumm's children attend - Adler's "no new taxes" was the absolutely wrong approach, he said.

Turner and Quinter made it clear that the fate of Robey's proposed tax increase is far from settled.

"I have seen people argue against a bill and turn around and vote for it," Turner said.

"It may be that the transfer tax is the worst alternative - except for all the others," Quinter mused.

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