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Editorial: Using taxes to pay off development infrastructure is bad public policy

If every homeowner in Harford County who wanted sidewalks cleared of snow every winter were to go to the county and ask that a public bond be issued to cover the cost of that work, and then the homeowners' property taxes be used to cover payments on the bond, it would be regarded as ridiculous.

After all, everyone knows shoveling snow from public sidewalks is the responsibility of the person who owns the property next to the sidewalk.

Such a scenario, on a grander scale and for the benefit of a developer, however, is exactly what the Harford County Council approved last week when it signed off on a Tax Increment Financing deal with the developers of 111 acres in Creswell near the I-95 interchange with Route 543.

After all, it has been well known in the development community for decades that developers are required to build roads, drainage systems, water and sewer infrastructure and sidewalks to a county standard. Those facilities are deeded to the county upon completion of the development and become the county's responsibility to maintain. Maintenance costs are covered by property taxes, and the costs of building the infrastructure are rolled into the price of the houses or commercial buildings, just as are other expenses like architectural and engineering fees.

The TIF changes all that. Infrastructure built by the developer is paid for with a county-backed bond and property taxes cover the cost of paying off the bond. The bond payments are either out of the regular tax bill, or collected through a special assessment on the new property owner. Either way, the developer gets a government subsidy that amounts to an unfair advantage over other developers who pay their own way.

In voting for the TIF, County Councilman Dion Guthrie noted that other Maryland counties make TIF deals all the time. Something else that happens all the time is in the summer, when kids jump off the Rumsey Island bridge. Possibly, Councilman Guthrie should do that, too.

There may be hope that the time for such unfair government backing of anointed developers may be passing. The TIF bill was approved by a vote of 4-3, with council members Joe Woods, Jim McMahan and Chad Shrodes voting against it. Unfortunately, their opposition to a bad public policy failed in this case.

Copyright © 2014, The Baltimore Sun
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