NICE TO SET YOUR OWN TAX RATES
I decided to title this blog the same as past years on this same issue, to maybe ring some bells. I was considering REPEAT BUT LOUDER, after all, I blog on this every year. Here we are again, with the May agenda for the County Council with several annual items of interest. It’s time for the Council to approve the next year’s rates of current fees in many areas. There’s the Dept. of Licensing and Permits and Department of Planning and Zoning fee chart that has not been increased for well over a decade (CR’s 72/73). There are also the annual rate for the Moderate Income Housing Unit (MIHU) rate for the fee-in-lieu developers can pay to not provide them in projects, and the Building Excise taxes builders also pay (CR’s 86/89).
These last two, the MIHU fee-in-lieu and builder excise taxes are only allowed to be increased by a certain amount. The increase is capped by an external industry journal’s inflation index. The building industry journal, the Engineering News Record (ENR) Baltimore Region’s construction index, caps the annual increase the Council can impose, by local County Code. Current legislation suggests a 5% increase. The indices this year range from almost 7% to over 12% depending on which month you choose in late 2020 or early 2021. Do we know which month or which percent is the maximum according to County Code? No, we do not. This is not something that is easy to find. It should certainly be part of the fiscal analysis of the legislation, and the Council should be told how much they are even allowed to consider.
There is clearly a problem with doing much less than the maximum allowed, as then the cap ever only benefits one side, but putting aside that issue for a moment, the cap must be eliminated. Other jurisdictions do not do this. Some mention taking the index into consideration, PG says it must be equal, but only HoCo says it's a maximum cap. This is an industry-derived annual increase cap on their own taxes and fees, including fees that allow NOT building MIHU affordable housing.
The County does not protect even themselves to this degree of control of fee decisions. They are tasked with the responsibility to set their own fees to at least cover the costs of administration, and that isn’t happening with the other resolutions this month, over a decade of not charging appropriate fees elsewhere, including parcel’s asking to change zoning regulations. (CR74)
We are currently in the process of updating the County’s General Plan, which guides building regulations and growth plans. We are going to hear from the development industry how they should have less restrictions, less fees, and faster processes. These plans are updated every ten years. The County is calling the current update, “HoCo By Design”. Part of the work to do the update includes having a Housing task force. Those recommendations recently came out. They touched on increasing the MIHU fee-in-lieu to get more spread out supply of these units.
The Racial Equity Task Force suggestions also touched on increasing the fee-in-lieu of providing MIHU affordable units. There are requests to have them be closer to the County’s cost. To do that, even coming anywhere close to that, the artificial cap must be eliminated first.
I have been clamoring for this to occur and giving this same similar testimony about the ENR cap on these charges for a very long time, at least 6 six years running now. Maybe enough groups and people agree now to see some change there.
Let the Council know how you feel about these fees sitting so long unchanged for DILP and DPZ, and removing the cap of low increases in MIHU fees-in-lieu and Building Excise Taxes, at CounciLMail@howardcountymd.gov