Montgomery County residents and workers commuting into the county would pick up much of the tab for financing the county’s growth, under recommendations released Tuesday from a group of local public policy and business leaders.
The panel, asked by the county council to examine strategies to pay for growth, gave five recommendations, four of which would mean tax increases: Taxing non-residential commuter parking spaces; taxing gasoline or motor vehicle registrations; raising the recordation tax on home sales; increasing transportation impact taxes; and increasing the use of bonds to finance projects, without jeopardizing the county’s coveted AAA bond rating.
“Any recommendation to raise taxes is a difficult one to provide and to accept,” said group member William Hudnut, Chevy Chase Town Council member and former Indianapolis mayor. “But, as somebody once said, taxes are the price we pay for civilization.”
The county needs roughly $135 million a year over 15 years to fund infrastructure maintenance, information technology systems, transportation and public safety requirements, the report said.
A new local tax on non-residential commuter parking spaces would yield $62 million to $88 million annually, the group estimated, if the rate per space were 10 cents an hour on all non-residential parking on weekdays, excluding Park and Ride and Metrorail spots.
“Some 37 percent of workers in Montgomery County commute from outside the county,” said group chairman Dale Susan Rosenthal, chief financial officer of the Clark Construction Group. “[The parking space tax] may contribute to other county goals of encouraging carpools or public transit use.”
The report also said the county could raise an estimated $75 million through a 15-cent-per-gallon motor fuel excise tax, a motor vehicle registration fee of $100 or a 6 percent motor fuel sales tax, but the county would need state authorization.
Group members back an increase in the recordation tax charged to homebuyers and sellers, incontrast to the county planning board and the county executive, who have advised against increasing the tax.
Raising the tax from $6.90 to $9.40 per $1,000 paid on property, exempting the first $50,000 paid, would add $37 million a year to the county’s coffers, the report said.
A homebuyer of a median-priced $510,000 house would pay about $1,150 extra under the plan.
The study acknowledged the group’s analysis “did not evaluate the full range of political considerations inherent in making revenue choices,” and several of the group’s seven voting members told the council they knew increasing taxes was a touchy subject.
“Nothing is free,” Council Member Nancy Floreen told The Examiner. “No one comes to us and says, ‘Cut my program, don’t do this other stuff,’ and [funding infrastructure] is a fundamental core function of government.”
Council members said the Management and Fiscal Policy Committee probably will discuss the study’s findings next month.
