Task force: Montgomery County rapid bus system to require property tax increase

March 25, 2012

Montgomery County officials want to ease growing traffic congestion by expanding bus transit, and a task force appointed by County Executive Isiah Leggett (D) is poised to argue that property taxes must increase to help pay for the plan.

For a year, the 26-member task force has researched how to implement a network of express bus lanes across the county, which is home to nearly a million people and is notorious for traffic congestion. The task force is finalizing a report on its findings and expects to release the document next month.

County officials and task force members say the rapid transit vehicle network is the most affordable option available to move commuters along increasingly congested corridors such as the Midcounty Highway, Randolph Road and Rockville Pike.

In weighing ways to pay for such a system, the task force considered other sources of revenue, such as income and sales tax increases. But it concluded that the alternatives could not be relied on to generate enough revenue and that such uncertainty could endanger the county’s AAA bond rating. Although expected state and local contributions to the project would reduce the property tax increase, they would not eliminate it.

The reach of any increase is among the questions the task force weighed. Some members said they want special taxing districts on commercial properties, like what Arlington County is expected to do to help fund a streetcar project with Fairfax County. Others said they want increases shared between businesses and homeowners.

A property tax hike could be a tough sell, especially to pay for buses, which are perceived by some advocates as an inferior alternative to rail. And then there are the practical and legal challenges of creating such routes, coupled with the possibility of additional costs.

One preliminary study had put the cost of the project at $2.5 billion, though that was a very rough estimate. To examine the various financing options, the task force has been working with an assumed cost of $2 billion. But the task force chairman, Mark Winston, said the actual cost will be determined by how ambitious a system the county decides to create.

The task force was presented with eight financing plans, all of which assume that taxes will increase when construction starts. Winston said the plans are “illustrative” examples and are not set in stone.

Under each of the financing options, property taxes would increase, peak in the near future and then drop or level off. One would tax the entire county. Others would impose a tax on landowners outside the agricultural reserve or on owners within a half-mile of the lanes. Depending on the plan, the owners of a $400,000 home could see their bill rise, at the peak point, as little as $220 a year and as much as $980 a year.

The revenue would pay for operating and capital costs and create a reserve fund for vehicle and station replacement and possible system expansion.

Most, including the three most affordable plans in the presentation, require changes in state law.

Task force members are expected to brief the Montgomery County Council on April 10. That day, the county planning board is expected to meet with the County Council in part to discuss when the board will present its official bus system proposal. Some council officials say they expect the proposal by early winter and a vote early next year.

In an interview last week, Leggett said his transportation and budget staff will analyze the task force report when it is done.

“There are a lot of things that we still have to address,” Leggett said. “Financing is a part of it.”

Manjit Singh, 71, runs an Indian grocery store on Old Columbia Pike, and the only practical way of reaching the store is by car. Customers interested in basmati rice or samosas drive there. Virtually no one takes a bus or walks.

So Singh was excited when he learned that Montgomery County officials want to build the bus network along Old Columbia Pike. That could mean more customers, he said. But he also is worried about how the county would pay for the system — especially if it means more taxes.

“Because of these hard times, it would be rather difficult to pay,” Singh said.

Some community activists have raised other concerns.

“I’m worried . . . that some of this rings hollow,” Darian Unger, a transportation activist, said at a recent community meeting in Silver Spring. “We can’t get people to the transit that we’ve got.”

Council member Marc Elrich (D-At Large), a task force member, said the system is a viable way to deal with the county’s transportation problems.

“If you don’t do [rapid] transit, then you’re stuck,” he said.

At a recent task force meeting, Tina Slater, president of Action Committee for Transit, said the first phase of construction must set the tone for the rest of the project by being well designed and well executed.

“Be paid for,” interjected Arthur Holmes, the county’s transportation director.

That’s the wild card,” Diane Ratcliff, a state transportation official, said to knowing laughs.

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