UM students urge tax help for green businesses
College Park officials say plan faces economic, legal hurdles
A student group at the University of Maryland, College Park, is pushing a tax credit program to bring green businesses to the city, but its plan might prove easier said than done.
Representatives from UMD for Clean Energy presented their plan to the College Park City Council at its Nov. 17 work session. Their proposal would give property tax breaks to businesses that provide energy-efficient products and services, as well as those that reduce their own carbon footprint.
It could take several years to implement, and city officials appear willing to listen. But the plan faces several obstacles, one of which is that it is not currently legal.
"I think it's a good idea," said Councilman Patrick Wojahn (Dist. 1). "We'd like to utilize some version of it and we're working on a fix right now with the state."
Municipalities in Maryland are not allowed to offer tax breaks to businesses based on whether they are environmentally friendly, or "green." Federal and state governments have done it for years mostly to reduce energy use and reliance on nonrenewable sources and counties in Maryland have had the right since May.
Nonetheless, the students said that with time and legislation, the proposed city-level tax break would make College Park a popular destination for a growing number of energy-efficient organizations.
"The renewable energy industry is expanding," said Matt Dernoga, who met with the council alongside fellow student Hilary Staver. "We're going to have to invest and shift away from conventional energy sources."
Their proposal would call for a two-tier system. Tier 1 businesses those that specialize in energy-efficient products and services would receive a tax credit. A smaller credit would go to Tier 2 businesses in non-"green" sectors that adopt eco-friendly practices such as recycling and improving stormwater management.
Edmonston-based Community Forklift, which collects and sells used building materials, and Beltsville-based solar energy provider SunEdison are examples of businesses that would qualify for Tier 1. Staver said the city has few, if any, Tier 1 qualifiers of its own and that adding new ones would have a positive impact.
The students did not suggest a specific amount for the credit.
"[If residents] see that these companies are taking steps to reduce environmental impact ... then it makes people think more about it in their lives," Staver said. "It helps set an example for the public."
While new Tier 1 businesses also would boost the city's revenue, Mayor Stephen Brayman expressed concern over the tax breaks existing city businesses could receive. He said that in difficult economic times, lower taxes for Tier 2 operations could leave residents to foot the bill.
"If residents are paying more taxes to give businesses tax breaks, that might not be popular," Brayman said, adding that the city's budget likely will shrink in 2011 and 2012 due to the current economic decline. "The city doesn't really have any money to give up."
The council and student group said they would be willing to work toward a compromise. City officials currently lobbying the state for permission to offer a revitalization tax credit to attract new businesses, and Wojahn said they could incorporate language that appeals specifically to green businesses.
"We could probably adopt some parts of [the students'] proposal," he said. "It's becoming more and more important to attract these types of businesses."
E-mail David Hill at email@example.com.