In a decision seen as an environmental victory, an Anne Arundel County judge yesterday upheld tax penalties for those who try to leave a state forest conservation program early and ruled that an Annapolis couple must pay $20,000 for backing out.
Circuit Judge Bruce C. Williams ruled that Kenneth and Sondra Read must pay the taxes for selling 1.2 acres of their 34 acres along Crab Creek while it was enrolled in the Forest Conservation and Management Program in November 1989.
The $184,078 sale occurred some 17 years before the expiration of Mr. Read's state agreement, which entitled him to substantial property tax breaks.
In a 13-page opinion, Judge Williams said Mr. Read brought the tax penalty on himself because he subdivided the parcel, causing its value to skyrocket from $2,000 in 1972 to $184,078 in 1989.
"The appellants, by their own initiative, changed the character of the subject property," the judge said.
The Reads' suit attacked the fairness of the state program, begun in the booming 1960s to slow development by offering tax breaks to anyone who agreed to keep at least 5 acres of woods undeveloped. The suit claimed that changes to the law enacted after the couple entered the program in 1972 made it more difficult to drop out and were unconstitutional.
A 1988 amendment to the program -- signed into law two years after Mr. Read renewed his 1972 agreement -- required anyone who withdraws land prematurely to pay retroactive property taxes.
Environmentalists feared that the suit could cripple the program, which has saved roughly 150,000 acres of woodland, by removing the retroactive tax penalties.
"I'm glad it's been left intact, because it means the continuation of a program that's very important," said Rupert Friday, a land-use planner with the Chesapeake Bay Foundation.
Attorneys for the State Department of Assessment and Taxation notified Mr. Read in November 1990 that he would have to pay the taxes on the property, assessed at $208,822.
Mr. Read, a professor of mechanical engineering at the U.S. Naval Academy, appealed the assessment to the Maryland Tax Court, which reduced the assessment but ruled that the retroactive taxes still had to be paid.
The suit in Anne Arundel was an appeal of that decision.
Alan R. Legum, Mr. Read's lawyer, said yesterday it is unfair to calculate the payment based on the state's retroactive formula, which requires Mr. Read to pay for each year the parcel was in the program.