Higher taxes are likely on new homes

Assembly also approves expanded school board

Bills need governor's signature

Columbia assessment cap receives lawmakers' OK

Howard County

April 13, 2004|By Larry Carson and Laura Cadiz | Larry Carson and Laura Cadiz,SUN STAFF

Howard County residents would see higher taxes on new homes, a 10 percent annual cap on increases in Columbia's property charges and an expanded school board as a result of the General Assembly session that ended at midnight.

The Senate unanimously approved the mandatory 10 percent ceiling on property assessments in Columbia on Saturday, granting financial relief to the planned community's residents. The excise tax passed the Senate the same day, 42-2.

"I really feel terrific," said Del. Shane E. Pendergrass, a Howard County Democrat who drafted the assessment-cap bill. "I worked hard, the citizens worked very hard; I give them so much credit."

The Columbia legislation is effective June 1, and bills that the Columbia Association is to send out in July for its annual charge - which is based on property values - should reflect the 10 percent cap. The legislation would also phase in assessment increases over three years and is retroactive, giving east Columbia residents a credit for sharply higher charges they paid last year.

The Columbia Association had reduced its property assessment rate 5 cents in response to the higher property values, which increased by one-third on average in east Columbia last year and by nearly one-half in west Columbia this year.

With a 10 percent cap, a 40 percent increase in value on a $200,000 house - to $280,000 - would save a homeowner $381 over three years.

Pendergrass submitted the legislation after many residents told her they struggled to pay their annual-charge bills after their homes significantly increased in value.

The credit for east Columbia residents "should come as a very pleasant surprise," said Columbia Association board member Barbara Russell, who represents Oakland Mills. "It should make up for the shock that they got in '04."

Another bill enacted by the legislature would require state funding of modular classrooms, as well as bricks-and-mortar buildings.

Sponsor Del. Frank S. Turner said that would help stretch scarce state school construction dollars.

The new-home excise tax was overwhelmingly enacted Saturday by the Senate, meaning that with Gov. Robert L. Ehrlich Jr.'s signature, the $1 per-square-foot surcharge for school construction would take effect July 1.

Despite approval by the Howard County delegation, County Executive James N. Robey said he remained anxious about final approval, especially after his two-year fight to win more taxing authority for building classrooms.

"Until it happened, there was always doubt," Robey said.

Without the new tax, "there would have been a $40 million gaping hole in our capital budget," he said.

Robey added that without the extra money, the study of how to expand seats at Bushy Park Elementary would have been "very difficult" to pay for, and the money for a new western elementary school in Dayton would have been "a question."

The tax is expected to bring in $4.9 million the first year and then slowly decline. But the revenue would enable the county to borrow about $58 million and then pay off the bonds over two decades.

Raymond S. Wacks, the county budget director, said Robey took a cautious approach to using money the new tax would produce by including about $42 million in his proposed capital budget for next fiscal year.

"We want to see what the actual revenue stream turns out to be," Wacks said, adding that by postponing some of the spending, "you postpone when you start paying the debt."

Several builders have begun seeking permits before July 1 to escape the new tax, according to Mike Evans, director of Inspections, Licenses and Permits.

The tax would apply to permits for home additions and finished basements in addition to new homes, but will not apply to open decks, Evans said.

Inclusion of home improvements under the tax is one reason he favored an impact fee over the excise tax, said County Councilman Christopher J. Merdon, an Ellicott City Republican.

But the excise tax "is a good second alternative. I will be supporting it," he said about the County Council bill that, if approved in May, would put the new tax into effect. Western county Republican Allan H. Kittleman and council Chairman Guy Guzzone, a North Laurel-Savage Democrat, also pledged their support.

The school board bill would expand the current five-member board to seven members, starting in 2006.

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