The Charles County Board of Commissioners adopted an ordinance last week that establishes the terms of the new excise tax that buyers of new homes will pay to finance school construction.
The ordinance takes effect July 1, but commissioners have not decided when the new charge first will appear on property tax bills.
Under the excise tax, buyers of new single-family homes will pay $9,700 over a 10-year period rather than the current $5,000 impact fee paid by home builders. Approved last spring by the Maryland General Assembly, this financing mechanism is designed to produce revenue more in line with the actual financial burden placed on county schools with each new home built.
Buyers of new townhouses and multifamily dwelling units will pay $9,200 and $7,000, respectively, over 10 years.
Commissioners passed the excise tax, 4-to-0, Tuesday -- Commissioner Jim Jarboe (D-La Plata) did not attend the meeting -- following months of public input and work sessions. The ordinance incorporates recommendations submitted by the Southern Maryland Association of Realtors Inc. in August, when the group aired concerns about the tax's impact on the real estate and building industries.
The association requested that the county begin levying the tax July 1, instead of Dec. 31 as initially planned, to allow ample time to educate the industry and new home buyers. The planning and fiscal services departments will conduct two information sessions per month beginning in January, said Steven T. Magoon, director of planning.
Developers who file complete building applications by June 30 still will pay the one-time impact fee. Projects on the waiting list for percolation tests will have an additional year to submit applications under the impact fee system if drought conditions halt the tests again as they did last spring.
Real estate representatives said they do not like the new tax but expressed satisfaction that the county had heeded their suggestions about when the new charge will be implemented.
"It gives us the opportunity to create the appropriate information for classes to instruct the people it's going to be affecting," said Beverly Rasmussen, chairwoman of the Realtors association's legislative committee. "We don't have any real heartaches."
The one lingering unresolved detail is when the county will collect the new tax. If officials wait to include the excise tax on yearly property tax bills, they won't collect revenue until July 2004.
Commissioners President Murray D. Levy (D-At Large), worried about the gap in cash flow, suggested issuing quarterly excise tax bills instead.
"If we don't do that . . . I believe we're going to have a fairly large hole in our bond payment schedule, which is going to be picking up to pay for our new high school," Levy said during a work session in October.
But Richard A. Winkler, director of the county's Department of Fiscal Services, said the treasurer's office would have to re-program its taxing software and increase administrative costs to issue bills on a quarterly basis. Waiting for a full year's revenue would mean a potential loss of only about $5,000, he said.
"When you look at it, is the juice worth the squeeze?" Winkler asked. "The impact of picking it up quarterly is not that great."