Group says tax districts are illegal Lawsuit claims fees don't benefit public

Special tax districts, which allow counties to assess communities with a special fee and disperse it to civic boards for specific projects, are illegal uses of public tax dollars, the state's highest court was told yesterday.

Robert J. Booze, an attorney representing himself and a group of Cape St. Claire residents, told the Court of Appeals yesterday the $30 a year special benefit tax levied on his community is being spent on beaches and a pier that are closed to the public.


The beach is open only to members of the Cape St. Claire Improvement Association.

"It's forcing people to pay for private projects with public funds," Mr. Booze said of the taxes, which are levied at the request of the affected communities.


Mr. Booze and a group of neighbors filed suit in Anne Arundel Circuit Court three years ago. They want the special benefit tax assessed in Cape St. Claire in 1989 declared illegal.

Both the Anne Arundel Circuit Court and the Court of Special Appeals have ruled in favor of Anne Arundel County. The county defended its 42 special tax districts as a practice authorized by state statute.

The Court of Appeals agreed to hear the case on appeal from the Court of Special Appeals and held oral arguments yesterday.

The county has been collecting and dispersing such funds for decades as an efficient way to ensure residents maintain the amenities in their communities, Anne Arundel County Attorney Judson Garrett argued yesterday.

"The case boils down to what a public purpose is," Mr. Garrett said.

He said the Express Powers Act authorizes county councils to set up such districts, as long as money spent is used for public purposes and the projects enhance the value of each property at roughly the equivalent of the tax imposed.

"The county collects it as part of the tax bill and it goes back to that community for projects the community wants," Mr. Garrett said.

In Anne Arundel County, the stakes are high. Some 10 different civic associations, which collect and disperse funds for the special benefit tax districts, have joined together to file an amici curiae, or "friend of the court," brief supporting the county's position.


Last year, the civic associations netted $2.1 million in special benefit district taxes to pay for everything from beach cleanups to park maintenance.

Mr. Garrett said funds must be approved by the County Council in its review of the county budget each year.

"Their budgets come in here and have to go through the budget process and anyone who doesn't like the way the monies are spent can come to the budget hearings and object," Mr. Garrett said.

But Mr. Booze countered that council approval is largely a "rubber stamp" allowing community associations that oversee the tax districts to spend the money as they see fit.

"Theoretically, taxes are supposed to be for a public benefit," Mr. Booze said. "Maintenance of a public beach that's not used nor open for the public is not a public benefit."

The court's decision would not affect communities governed by covenants, such as Crofton and Columbia. In those areas, homeowners' associations collect annual fees from property owners to fund maintenance of common areas and parks. Covenants signed when the property is purchased obligate the owners to make those payments.