State Delegate, Trade Groups Criticize St. Mary’s Commissioners’ Proposal To Raise Taxes

LEONARDTOWN, Md. – The St. Mary’s County Commissioners are currently mulling a proposal to transition from an impact fee to an excise tax and raise that new tax by over 350%. At the same time, the commissioners are considering raising property taxes by roughly 3.5%.

Although parts of the planned transition to the excise tax bring benefits, the new proposal is a strong deviation from what the original legislation intended.

“The St. Mary’s Delegation supported exchanging impact fees for the excise tax to allow the Commissioners greater flexibility on what and where to spend tax revenue. The plan was always to be revenue neutral,” Delegate Matt Morgan [R-St. Mary’s] said. “I would be deeply disappointed to find out that a board of Republican Commissioners didn’t keep their word and used it as an opportunity to raise taxes.”

In addition to drastically increasing the residential excise tax and creating a commercial excise tax, the commissioners are considering deviating from the proposed constant yield tax rate.

Constant yield is implemented to provide continuity in county budgets when home assessments fluctuate. As home values saw drastic increases over the last year, so would property taxes if not for constant yield. However, the commissioners are now considering a variation from the proposed constant yield tax rate that would raise property taxes by about 3.5% across the county, resulting in almost $4 million in additional revenue.

The Southern Maryland Association of REALTORS® (SMAR) have asked the commissioners to adopt the proposed constant yield tax rate while remaining revenue neutral as they transition from an impact fee to an excise tax. Both changes will result in additional costs for homebuyers, at the same time the country is grappling with economic strain and inflation.

“The commissioners have been responsive to our requests, but now we hope they take action to stop tax increases on homeowners and their constituents. These additional costs will be transferred directly to buyers, placing the American Dream out of reach for more people,” SMAR 2022-23 President Michael Funk said. “Everyone wants to see St. Mary’s County remain a safe and well-maintained place to live. We want to see the county grow smartly and responsibly, but these large tax increases will stand in the way of that.”

These tax increases also could have long-term negative impacts if enacted. The Maryland
Building Industry Association (MBIA) also criticizes how encouraging developers to build smaller homes to avoid a large one-time up-front fee will have negative impacts on the county’s potentially taxable base over the life of the home. “These tax increases have the potential to really harm the housing ecosystem in St. Mary’s County,” MBIA CEO Lori Graf said. “The struggle of building a home faces more hurdles everyday, and additional costs to developers from government regulation is one of the hardest to mitigate without hurting consumers. At a time where housing costs are so high, these taxincreases could be detrimental to the continued responsible growth in the county.”

For those interested in learning more and letting the commissioners know you oppose tax
increases, click here: https://bit.ly/3UEiuXR

The commissioners will be holding a public hearing specifically on the Excise Tax on April 18th .

The hearing will be held in the Chesapeake Building in Leonardtown at 6:30 p.m.
The commissioners will be holding a public hearing again to discuss the full county budget on April 25th . That hearing be held at Chopticon High School at 6:30 p.m.