Delegation OKs an excise tax on new homes

HOWARD COUNTY — After two years of wrangling, Howard County's state legislators approved an excise tax on new homes yesterday to raise money for school construction.

The vote makes Howard the second Baltimore suburban county to win local legislative approval for tax increases as state school construction money dries up.


Despite a lopsided 8-2 vote, the new Howard tax of $1 per square foot on new homes represents a hard-fought compromise, and county officials were uncertain wether it will provide enough revenue to pay for the new high school and three new elementary buildings planned during the next four years.

"I don't know," if the new money will provide what's needed, County Executive James N. Robey said after the meeting.


He had asked for a transfer tax increase on all property sales that would have raised about $200 million. That idea was defeated last year and again this year. Instead, he got the excise tax on new homes priced for more than $200,000, which is expected to leverage $58 million.

"Obviously, I'm happy. We've come a long way, and we've accomplished something of significance to the school system. It leaves us with some tough decisions to make," Robey said.

"We're grateful they have approved something," said Courtney Watson, chairman of the school board, who also attended the session. "But it's not enough to keep all three new [elementary] schools on track."

Squeezed by growing enrollment, state budget cuts and less state funding for school construction, several suburban Baltimore counties have sought help from their local legislators during the 90-day General Assembly session, but with mixed results.

The Howard delegation's action followed a vote Feb. 6 by Harford County legislators authorizing impact fees of up to $10,000 a house for schools. Anne Arundel legislators are considering a cellular-phone tax requested by County Executive Janet S. Owens, but Carroll County legislators turned down their county commissioners' request for help by rejecting a real estate property transfer tax. Frederick's commissioners asked for a hotel tax for tourism funding and a transfer tax to raise money for transportation; both are pending.

The action on the tax increase to aid school construction came after two years of effort on Robey's part to get revenue help from the county's legislators. Still pending is a bill sponsored by Del. Elizabeth Bobo, a Democrat, that would restore the county's authority to levy impact fees on new homes - a county government power removed in 1991.

After more discussion of amendments at yesterday morning's delegation meeting in Annapolis, an impatient Del. James E. Malone Jr., a Democrat, urged his peers to act on the compromise crafted by the county's three state senators, Edward J. Kasemeyer, a Democrat, and two Republicans, Robert H. Kittleman and Sandra B. Schrader. Kasemeyer, who has legislative leadership meetings Wednesday mornings, did not attend the delegation meeting.

"I think we've discussed the heck out it. Let's vote," Malone said. Local bills must be approved by the entire General Assembly, but it is the local delegation that decides their fate.


In the end, only Dels. Gail H. Bates and Warren E. Miller, both western county Republicans, opposed the excise tax measure. That drew criticism from House delegation Chairman Frank S. Turner, a Columbia Democrat who, like Bobo, sponsor of the excise-tax bill, favored a tax of $2.25 per square foot to produce more revenue.

"I'm a little surprised at the vote, knowing the area of the county where the greatest needs are, and the delegates did not support the vote," he said, referring to crowded schools in the western county represented by Bates and Miller.

Bates later rejected the jibe, arguing that although Bushy Park Elementary has the greatest need, the county school board has no firm plan to take care of that need. The capital budget calls for a study of Bushy Park, which will get temporary relief when a new elementary is built in Dayton by 2006.

"That's our most crowded school, and there's nothing in the budget to address it," Bates said, adding, "I don't think the [enrollment] numbers support the level of continued [school] construction."

Robey's transfer tax proposal would have produced an estimated $10 million a year in revenue, which would have been used to borrow up to $200 million and then pay off the debt. The $1-a-square-foot excise tax is estimated to produce about $3.5 million a year, which could be used to borrow about $58 million and pay off the debt. The new northern high school, under construction across from Mount View Middle School, is to cost $53 million. Yesterday, Howard's legislators also killed a bill that would have cut property tax bills in half for homeowners older than age 60 because of its $14.4 million estimated annual cost. Only Bates and Miller voted for it. The group approved a measure sponsored by Bobo that would - in 2009 - withdraw agricultural assessments from undeveloped Columbia land zoned for building, which could raise up to $200,000 annually in property taxes.