Harford County Councilman Dion Guthrie (District A) plans to introduce a bill to eliminate the impact fee on new home sales at the council meeting October 7, 2008. Guthrie said he has support at this time from Councilman Chad Shrodes (District D) and Councilwoman Mary Ann Lisanti (District F).
Guthrie told The Dagger he had not supported the impact fee when it was first enacted by the Council in 2005, saying it was “an unfair tax because it only taxes new homes and not used homes.” Guthrie noted that families moving into existing homes also impact schools and other infrastructure, which the impact fee was designed to offset.
Guthrie said he is introducing the measure now because the “mortgage catastrophe” has required larger down payments from new home buyers and has “stymied new home sales” in the county. His intention is to boost new home sales and therefore the tax base, calling the effort an “economic stimulus for people who live in the community”.
Asked about the loss of funds to county coffers if the impact fee is eliminated, Guthrie said he would prefer to increase the 1% transfer tax currently charged on the sale of existing homes to a rate of 1.5%. Such an increase would require enabling legislation from the county delegation which has resisted previous requests from the Council.
County revenue from the transfer tax is split between school construction and agricultural preservation. Guthrie said those funds have deteriorated with the slowdown in the housing market said he anticipates County Executive David Craig will request a fund transfer into the ag preservation program at the October 7 meeting, which Guthrie said would not be well-received by some on the Council.