Treasurer warns of higher taxes if new homes slowed

Bill to ease crowding in schools cuts county's revenue base, he says

March 07, 2004|By Ted Shelsby | Ted Shelsby,SUN STAFF

Harford residents could be forced to pay higher property and income taxes if the County Council approves legislation designed to slow new housing development to reduce school crowding, a top county official said.

Treasurer John Scotten Jr. told members of the council Wednesday that changing the county's adequate public facilities laws could limit construction of new homes and thus cut into the county's revenue base. He said the county would be forced to increase taxes to make up the difference.

Scotten's comment came during a council work session to discuss proposed legislation that would halt preliminary approval for new homes in any school district with a school that exceeds its enrollment capacity by more than 5 percent.

The treasurer said that it would be necessary to boost the average homeowner's property tax by $20 a year and income tax by $75 a year.

"I can't say if you pass this bill it will occur today or the next day," Scotten said. "But we would be looking at a revenue loss."

He said a decline in home construction would reduce revenue from the recordation taxes and transfer taxes that homebuyers pay upon settlement.

During the work session, Peter Gutwald, manager of comprehensive planning at the Department of Planning and Zoning, gave council members a diagram showing that the proposed change in the laws would halt development in the majority of the southern part of the county.

J. Steven Kaii-Ziegler, director of planning and zoning, said the new law would "pretty much shut down the [county's] development envelope." He said it would also stimulate development in rural areas outside the envelope.

A `more drastic step'

Five of the seven council members are listed as sponsors of the bill that seeks to change the adequate public facilities laws.

Under the proposed legislation, plans for new homes would be halted in a school district with a school that exceeds 105 percent of its designed enrollment capacity. It would also halt development in an area if a school were projected to exceed 105 percent of its capacity within five years.

Councilman Dion F. Guthrie, a Democrat representing Joppatowne and Edgewood and the original sponsor of the bill, said it would not apply to individual families seeking to build a new home. He said the law would apply only to the construction of five or more homes in a development.

The new bill comes only four months after the council approved similar legislation that reduced the student threshold rate to 115 percent from 120 percent.

Council President Robert S. Wagner said the council was being forced to consider a "more drastic step" because of the recent actions of the county's delegation to the General Assembly.

The council members had asked the delegation for enabling legislation that would have allowed them to increase the transfer tax on new and existing homes to 1.5 percent from 1 percent.

They also requested the authority to impose an excise tax on new and existing homes, and impose an impact fee of up to $10,000 on new homes.

The delegation rejected all the proposals with the exception of the impact fee on new homes.

All the revenue from those proposed fees would have been used only for the construction of new schools and the renovation of older school buildings.

Builders will keep busy

Councilman Robert G. Cassilly, a Republican who represents the Bel Air area, pointed out that a change in the adequate public facilities law would not stop home construction overnight.

He said there were enough houses with preliminary approval to keep homebuilders busy for years.

"We will still have some level of development," he said.

"We are all trying to do the right thing," to keep the county economically viable while serving the needs of students, Wagner said.

The discussion will resume when the council meets with representatives of the school system and planning and zoning at 4 p.m. Wednesday in the council chamber.

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