More News

A bill to enable Montgomery County to tax commercial property at a different rate from residential property would help economic development, says the delegate pushing the legislation, but the county Chamber of Commerce isn't buying it.

"The two biggest challenges in Montgomery County to economic development are getting funding for transportation projects and addressing the high cost of living in the area," said Del. Alfred C. Carr Jr. "Montgomery County doesn't have a lot of tools to help them deal with these problems. This is a tool that would help them deal with it."

Carr plans to introduce the bill during the 2009 General Assembly as local legislation applying only to Montgomery County. He introduced the same bill, with a statewide focus, during this year's session. It died in the House Ways and Means Committee.

The Montgomery County Chamber of Commerce opposed the bill and likely would do so again, said Lisa Fadden, the chamber's vice president for public affairs.

"Obviously, we are in such a tenuous economy, and we are very, very concerned that this would further increase the tax burden on businesses," Fadden said.

In 2007, the Virginia General Assembly passed legislation that gave counties the ability to raise commercial property taxes by up to 25 cents per $100 of assessed value in order to generate revenue for transportation projects.

Fairfax County responded by approving an 11-cent tax hike, which is expected to generate $52 million in new revenue for transportation projects.

With the state recently announcing $1.1 billion in cuts to its plan for transportation projects over the next six years, including $112.7 million in aid to road and transit projects in Montgomery County, lawmakers are scrambling to find new ways of funding transportation projects.

"Local government policymakers should have all the different tools at their disposal," said Carr (D-Dist. 18) of Kensington.

While Maryland municipalities already have the ability to impose property taxes on different classes of property, counties have one uniform property tax rate for real property and a rate for personal property that is 2.5 times the real property rate.

In Montgomery County, with an assessable real property tax base of more than $180 million, the real property rate was .916 cents on every $100 of assessed value in the fiscal year that ended June 30.

The bill would give the council the ability to do away with burdensome taxes on business as well as the ability to enact different tax rates, Carr said.

Some municipalities have used their authority to eliminate a tax that businesses pay to the county on computer equipment, he said.

Commercial property owners' fears that the County Council would misuse the taxing authority are "unwarranted," said Carr, a former Kensington town councilman.

"As a former local official, one of the things I learned is local officials know that business and individuals have a choice of where to live, where to raise their families and where to invest," he said.

Opponents say the legislation would add uncertainty in a state where in the past year the General Assembly adopted, then repealed, a tax on computer services that had companies threatening to leave.

"Maryland has sent a message to the rest of the world that we have a bit of an unpredictable climate," Fadden said.