Leggett Says Tax Proposal Might Stifle Needed Growth

County Executive Isiah Leggett (D) said Montgomery must still provide "avenues for growth." (By Ricky Carioti -- The Washington Post)

Montgomery County Executive Isiah Leggett said he is concerned that a Planning Board proposal to substantially increase taxes on builders to pay for new roads, schools and public transit would discourage needed new development.

Leggett (D) stopped short of saying he would oppose the idea, but he made his reservations clear in an interview with The Washington Post.

"The challenge is to make sure the standards that are changed are more stringent but at the same time you provide some avenues for growth," Leggett said Friday. "Costs can be increased but not to the point they become counterproductive. We need to determine where the tipping point is."

Other officials and representatives of the building industry also voiced concerns. The proposal -- one of a series endorsed Thursday by the board -- goes to the County Council, which is expected to hold several hearings before voting in late July.

The proposals offer recommendations to county officials about how to manage growth as buildable land dwindles, roads become increasingly clogged and the population increases. Montgomery is nearing 1 million residents and is expected to grow by a third in the next 20 years.

Among the Planning Board's proposals are allowing higher-density development, particularly in areas served by public transportation, and offering incentives to developers who create bike paths and walkways and buy clean-fuel buses for the county's Ride On system. The recommendations also encourage the county government to more carefully calibrate its capital budget to ensure there is no substantial growth without construction of more schools.

The board suggested financing the initiatives by doubling school taxes for a new single-family house to $22,729 and increasing transportation fees from $5,819 to $8,380 in many areas. Those taxes are charged to developers, who generally pass them on to home buyers. The recordation tax, often split at closing between buyers and sellers, would almost double to about $11 per $1,000 of value, after the first $50,000 is exempted.

The Planning Board accelerated its planned revision of the county's growth policy after the council rejected a proposed moratorium early this year and instead asked the board to revamp the policy more quickly.

Royce Hanson, the Planning Board chairman who shepherded the plan in a series of recent meetings, defended the proposal yesterday.

"Montgomery County for the past two decades has been a very profitable place to develop," Hanson said. "We don't see that changing."

Building industry representatives disagreed.

Steven Robins, a development lawyer, said the tax increases would put a huge burden on builders. He called the increases "unrealistic and more than a project can really absorb."

"Development is willing to pay its fair share, but increases of this magnitude are unacceptable," Robins said yesterday.

The board's inch-thick document, the first growth policy revision in four years, includes at least one proposal that would loosen growth restrictions. It would change the way road congestion is determined by taking into account the availability of buses and subways.

Some neighborhoods that are considered congested because of a high volume of road traffic would no longer be because of the availability of public transit.

Council member Marc Elrich (D-At Large), who has often sided with Leggett on slowing growth, said Friday that that idea should be rethought.

"To tell the community you have to accept more pain because there are some buses running around is ludicrous," he said.

Council member Nancy Floreen (D-At Large), a member of the now-defunct "End Gridlock" slate that led efforts to ease some growth restrictions in 2003, said Friday that she thought some of the new proposals were politically perilous.

"You have to balance affordable housing issues," she said.