Defeat of tax not seen as critical

Real estate levy wasn't built into planned budget

Projects could be delayed, scrapped

Carroll County

General Assembly

February 03, 2005|By Mary Gail Hare | Mary Gail Hare,SUN STAFF

The defeat of the Carroll County commissioners' proposed real estate transfer tax won't have staff members frantically reworking the budget, but it could mean projects are delayed or scrapped.

Carroll's legislative delegation voted 4-3 against the tax Tuesday in Annapolis, refusing to support it in the General Assembly. The seven-member delegation will support the county's other proposed bills, including a hotel tax and a tax credit for the elderly.

The 1 percent levy on home sales could have generated about $7.5 million in revenue next year, which the commissioners said would have been used for school and roads projects.

"We never built the transfer tax into the budget, so we don't have to work backward to pull it out," said Ted Zaleski, the county director of management and budget. "We are exactly where we were before. But that long list of projects we might have attacked will not disappear."

Zaleski was referring to $250 million in school construction projects and more than $70 million in road repairs.

"There will be some projects now that we won't be able to do," said Commissioner Perry L. Jones Jr. "We will definitely have to prioritize."

Sen. Allan H. Kittleman said he reviewed the county budgets for the past six years before deciding that he could not support the transfer tax. In the past two years, the commissioners have enacted increases in recordation fees, income taxes and impact fees charged on construction.

"I have a hard time accepting that many taxes in so short a time," Kittleman said. "You can't raise taxes four times in less than three years. I am not saying that there is not a need, but I am asking the commissioners to do the best they can with what they have."

Del. Nancy R. Stocksdale estimated a $38 million increase in revenue from the three previous increases and said she "could not justify any more taxes."

The county posted a $12.5 million surplus this year, more than enough to fund several improvements, opponents of the transfer tax said. That surplus was "the icing on the cake" for Del. Tanya Thornton Shewell, who voted against the transfer-tax measure.

"The surplus should not play into the decision," Zaleski said. "It indicates prudent financial management."

Commissioner Julia Walsh Gouge said the board has acted frugally in laying out its six-year capital improvements plan.

"We know where we are going, and we have been efficient about how we run government," Gouge said. "All the bond ratings agencies have told us that over and over."

The commissioners tried several compromises in an attempt to make the proposal amenable to the delegation, including lowering the proposed tax to 0.75 percent, Jones said. The proposal also included a 5 percent limit on annual tax assessment increases and allowed homebuyers up to five years to pay the tax.

"They tried to amend it, but nothing made it palatable enough," said Sen. Larry E. Haines, leader of Carroll's all-Republican delegation.

Del. Susan W. Krebs, who voted for the proposal along with Del. Donald B. Elliott and Sen. David R. Brinkley, called the amendments "a reasonable compromise."

"We are trying hard to work with the commissioners who are trying to get us out of the huge hole we are in with roads and schools," Krebs said. "I feel comfortable with the compromise we reached and with my decision to support it."

In more than 20 years in the legislature, Elliott said, he has rarely voted for any tax.

"I thought there was a genuine need on the part of the commissioners for a new revenue stream," Elliott said. "I felt this tax was justified. We have to face facts as they are. The state is placing mandates and unless there is a source of revenue to accomplish those, we have a problem."

The rejection of the tax means the commissioners have several tough decisions to make.

"I have to figure out how much is available and what the commissioners can accomplish with it," Zaleski said.

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