Montgomery County Taxpayers League
Testimony on the Housing Impact Fairness Act, December 3rd, 2019
The Taxpayers League is committed to tax fairness. This includes supporting efforts to better capture the value of property improvements. This way homeowners of unimproved properties are not subsidizing those with improvements. We support Mr. Glass for taking a lead to redress this. The following are our comments on the Housing Impact Fairness Act as we understand its current text:
- We support amendment to treat major improvements involving substantial demolition of existing property as “new construction,” and subjecting these to property taxes above the Charter limit under Section 305;
- Lack of timely and accurate property assessments is a big problem. Thus, we further recommend the county strongly consider steps to take over assessments from SDTA – as is done in 48 other states — of property improvements exceeding $100,000, in return for the 10% of property taxes we share with the State, unless SDAT is clearly demonstrating substantial improvement in its conduct of timely and accurate assessments. The League estimates that this could generate tens of millions of dollars in revenues (based on waived final assessments of thousands of such improvements), while improving efficiency and equity in tax assessments;
- Concerning the proposal to assess impact taxes on property improvements for homes built prior to 2004 (for which impact taxes have never been assessed), the Taxpayers League is more nuanced. Grandfathering taxes is a precedence generally to be avoided and can introduce degrees of unfairness itself. At the least, the final bill should be amended to distinguish developers from original owners who plan to continue living in the residence, and perhaps, non-original owners;
- The Taxpayers League cannot support the proposed demolition excise tax on the basis of tax fairness and because it does little to support affordable housing, especially for low income tiers.
- Finally, and most importantly, we urge a major review of the county’s affordable housing programs to improve efficiency, remove duplication among departments, reduce risks, and quantitively determine the cost-effectiveness of current programs.
Whatever shape this bill takes, it represents just one small step when addressing the complex and serious issue of affordable housing. The Taxpayers League has placed affordable housing among its top priorities. We hope for the opportunity to work closely with the Council to produce a strong Housing Impact Fairness. Looking forward, we ask for the opportunity to work together the Council as you continue to take positive steps to address affordable housing. The Taxpayers League is currently engaged in producing a report on the Affordable Housing similar to our recently released Education Report. Thank You.
Edward Amatetti, President, Montgomery County Taxpayers League