Calvert County's legislative delegation in Annapolis has rejected a last-minute request by the county commissioners for the authority to impose a new real estate transfer tax.
The commissioners received a letter from House Majority Whip Del. George W. Owings III (D-Calvert and Anne Arundel) saying that he and the other members of the county's delegation will not support the proposal "since it was felt that the state, over the years, has tried to keep down the cost of settlement charges, especially for first-time buyers."
"Maryland is notoriously high when compared with most other states in the area of closing costs," Owings wrote. "The delegation felt that in this economy especially, now is not the time to make it more burdensome on those purchasing homes."
Without state legislative approval, the commissioners would be unable to consider the transfer tax, which had been envisioned as a possible additional source of revenue needed to make up for expected cuts in state aid.
The possibility of a transfer tax first came up at a closed-door orientation session the commissioners held last month. The first public discussion occurred a week later. Commissioner Linda L. Kelley (R-At Large) opposed asking the legislature for such authority.
In a subsequent meeting in Annapolis between some commissioners and the delegation, the transfer tax was discussed and remained a live possibility at the close of the session.
In the orientation session with the county's top finance official, the commissioners were presented with a list of possible tax or fee increases. The elimination of the proposed real estate transfer tax narrows the commissioners' options for generating additional revenue if needed. Initial projections were that the transfer tax could raise as much as $5 million in a single year.
The commissioners have not yet arrived at a point in their budget planning for fiscal year 2004 where specifics of revenue sources are part of the discussion. On Tuesday, the commissioners continued contemplating the expenditure side of the budget, holding an afternoon work session with county staffers concerning a proposed $26.2 million Capital Improvement Program for the coming fiscal year.
Nearly a third of the proposed construction spending would be for school-related projects.
Still, the commissioners issued a warning last week that they may seek further cuts in a staff-developed fiscal 2004 operating budget proposal that already calls for no spending increases because of anticipated state funding cuts.
Also last week, the commissioners decided to abandon the practice in recent years of meeting individually with agency heads, elected officials and others seeking funding increases in the annual budget. Individual commissioners stressed that all funding requests -- not just those involving spending increases -- would be scrutinized this year.
The commissioners will not know how much revenue is needed until they have a clear idea of how cuts in state aid will affect Calvert. One big concern is the potential loss of state payments for income lost as a result of Maryland's deregulation of electric utilities. Calvert budget planners projected a state payment of $6.1 million for revenues lost from its biggest taxpayer, the Calvert Cliffs Nuclear Power Plant.