Builders would provide thousands of dollars for school construction for every home they built under County Council proposal for an education impact tax.
The bill, proposed by County Councilmembers Tom Perez (D-5) and Phil Andrews (D-3), would tax new developments and put money generated by that tax into a dedicated fund for capital improvements to schools. Capital improvements include such things as modernization and building of new facilities.
“The schools are simply overcrowded,” said Perez.
He noted that the budget presented by the county executive takes money from the capital budget and shifts it into the operating budget.
“In solving one crisis, we have exacerbated another,” Perez said.
The tax could generate $10 million per year for the schools. Perez noted that taxpayers are already paying their share of school costs. “We should ask other stakeholders to pay their fair share,” he said.
When coupled with a different development tax hike proposed by councilmember Marilyn Praisner (D-4), Montgomery County’s total impact tax could go to just over $6,000 for a single-family, detached home. This rate would be the fourth highest in the state behind Charles, Frederick and Prince George’s counties.
The Montgomery County Board of Education, several PTSAs, the Montgomery County Taxpayers League, the NAACP and the Audubon Society all came to support the bill.
“It certainly is a step in the right direction,” said Sharon Cox, School Board Vice President.
Cox noted that over the past two years 9,500 new housing units have added 4,200 new students in county schools. Cox said that number of new students will cost $100 million in capital improvements to the schools over two years. “[The tax] would dedicate funds to the capital budget — unless funds are dedicated they can be taken,” Cox said.
Builders oppose the impact tax proposals at the public hearing.
“We are opposed to both the substance and the timing of bill 9-03 and the Praisner resolution,” said Nanci James, vice president of the Maryland-National Capital Building Industry Association (BIA). “It should be deferred until the comprehensive review of the Annual Growth Policy (AGP) is complete,” James said.
The Building Industry Association says that the AGP will help to identify the root causes of the school enrollment issue and that the proposed bill is therefore premature.
This tax needs to be implemented as soon as possible in order to begin collecting revenue, said Andrews. “Every day we don’t do this will be another $30,000,” he said.