Haines defends second career

Senator's real estate job raises critics' ire

General Assembly

March 18, 2006|By MARY GAIL HARE | MARY GAIL HARE,SUN REPORTER

The chairman of the Carroll County legislative delegation has pursued tax policies that critics say benefit the senator's real estate business at the expense of projects the county needs to accommodate burgeoning growth.

Sen. Larry E. Haines, who promotes his Westminster-based Haines Realty as the "Name that Sells" and whose list of campaign contributors includes prominent developers, has blocked the efforts of local leaders to increase fees on home sales, and is now pursuing a proposal that will cut property taxes paid by homeowners.

But Haines says he merely opposes higher taxes and sees no conflict between his duties to the state and to his business.

"There is no conflict of interest -- period," said Haines, a four-term Republican. "We are citizen legislators, a diverse group of people of all professions. We all represent our constituents with our expertise in certain fields."

Others aren't so sure.

"This is egregious because he benefits personally from legislation he is taking part in. He should recuse himself from anything that impacts on him personally or on his business," said Bobbie Walton, executive director of Common Cause Maryland. "Certainly, this situation creates the appearance of conflict."

Instead, Haines is sponsoring a bill to increase tax credits for homeowners facing rising assessments in Carroll County -- something that could enhance property values and benefit realtors.

The county commissioners testified against the bill, which legislative analysts say would cost the county $2 million in the next fiscal year and more than twice that the year after. Instead of reduced credit, the commissioners would prefer a transfer tax -- a fee paid when a home is sold -- under the theory that newcomers to the county should help offset the costs of building roads, schools and other needs related to growth.

The commissioners tried for three years to have the delegation enact a transfer tax on real estate sales. The 1 percent tax, which would have been levied at the settlement of a property, would have generated about $7.5 million this year, revenue that would have made growth pay for growth, the commissioners said.

A transfer tax could help defray growth costs, said Baltimore County Councilman T. Bryan McIntire, a former state's attorney for Carroll County.

"A transfer tax is innocuous and adds only onto the cost of settlement," McIntire. "Of course, some people cannot be objective because they are in the real estate business."

The General Assembly must approve a transfer tax and would do so as a legislative courtesy, provided the tax had the support of the local delegation. But the delegation, led by Haines, has refused. The delegation voted against the measure 4-3 last year, and the bill never advanced to the General Assembly.

This year, the commissioners didn't raise the issue again, despite some support from Delegates Donald B. Elliott and Susan W. Krebs. Elliott said he does not always agree with Haines, but he respects his leadership.

"I believe the commissioners have a difficult job governing a massive bedroom community with little industry," said Elliott, who represents Carroll and Frederick counties. "We somehow have to come up with a compromise."

Krebs, who represents South Carroll, called the commissioners "historically fiscally conservative," with a strong sense of what the county needs.

"It is tough to balance the wants and needs of the county and also keep taxes low," said Krebs.

Haines introduced a proposal to cut the homestead tax credit this year without input from the commissioners, who say the credit will create serious gaps in their five-year budget plans. The credit safeguards homeowners from spiraling assessments by limiting the increase by a set percentage annually.

"This is not the smartest bill for him to sponsor," said Tom Hucker, executive director of Progressive Maryland. "This is one of the conflicts that comes up frequently because we have a part-time Assembly who nearly all have other jobs. Legislators are certainly supposed to avoid any appearance of conflict."

Haines has made no secret of his 40-year career in real estate. His cell phone rang twice during a recent hearing before the Senate Budget and Taxation Committee. One senator jokingly advised Haines to take the call because it could be a buyer.

"Real estate supplements my Senate income," Haines quipped.

The day she took office, Commissioner Julia Walsh Gouge said she gave up a real estate license that allowed her to work in Maryland and Pennsylvania.

"I debated whether I should pay dues and keep up the license, but I decided to turn it in," she said. "You cannot have even a perceived conflict."

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