Agenda Item 1
May 12, 2016
Worksession
MEMORANDUM
May 11, 2016
TO:
FROM:
County Council
~
·
Robert H. Drummer, Senior Legislative Attorney
Glenn Orlin, Deputy Council Administrator
(c;
SUBJECT:
Worksession:
Expedited Bill 15-16, Recordation Tax
Amendments
Rates - Allocations -
Expedited Bill 15-16, Recordation Tax - Rates Allocations - Amendments, sponsored by
Lead Sponsor Council President Floreen, was introduced on April 19, 2016. A public hearing was
held on May 10.
Bill 15-16 would increase the rate of the recordation tax levied under state law and allocate
the revenue received from the recordation
tax
for different uses.
Background
Recordation taxes are paid when a house or building is sold, or if the mortgage on a house
or building is refinanced. There are three elements of the recordation tax:
The "base" recordation rate is $2.20/$500 on the sale price or, if refinancing, on the
additional amount borrowed over the remaining principal.
(If
acquiring a home, the first
$50,000 of the sale cost is exempt.) Bill 15-16 would not change the "base" rate or how
its revenue is allocated.
The "school increment" went into effect in 2004 and its rate is $1.25/$500.
It
is also based
on the sale price or, if refinancing, on the additional amount borrowed over the remaining
principal. This Bill would raise the rate to $2.00/$500, effective July 1, and would generate
$125 million over the next six years. Currently the proceeds can be used for any
Montgomery County Public Schools (MCPS) capital project and for any Montgomery
College information technology capital project. The Bill would dedicate all the proceeds
to MCPS projects; College information technology projects can still be funded with general
Current Revenue.
The "Recordation Tax Premium" went into effect in 2008 and its rate is $1.55/$500. Unlike
the other two elements, the Premium applies only to the cost of a property or a refinancing
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that is in excess of $500,000. Half of the proceeds from the Premium are allocated to
County Government capital projects (i.e., capital projects of departments in the Executive
Branch); the other half is for rent assistance. This Bill would raise the rate to $2.30/$500,
effective July 1, and would generate $30 million more for County Government projects
and $30 million more for rental assistance over the next six years. On March 22, the
Council heard from Enterprise Community Partners about the need for more affordable
housing in Montgomery County and that part of the solution is more money. The
Recordation Tax Premium is an important revenue source for the Housing Initiative Fund.
It has been used for traditional monthly rental assistance and very effectively at the
Bonifant to make many of these new units affordable to very low income seniors. The
Department of Housing and Community Affairs has projects in the pipeline that may need
$40 to $50 million. This funding will help make sure there is adequate funding to move
forward when projects and programs are ready.
Lead Sponsor, Council President Floreen, explained the need for this Bill in an April 12
memorandum at ©5-6.
Public Hearing
The
Co~cil
held a spirited public hearing on May 10 with 17 speakers and a large
audience. There were 2 opposing views. Lisa Siegel, representing the Ro Hing Terrace PTA (©26-
28), Sally McCarthy, representing the Walt Whitman Cluster (©58-59), Joyce Breiner (©60),
Charissa Scott, representing the Blake High School Cluster, Melissa McKenna, Maryvale
Elementary PTA, Joseph Piff, representing the Walter Johnson Cluster (©75-76), Debby Orsak,
representing Ashburton Elementary School (©77), Oscar Alvarenga, representing the
Gaithersburg High School Cluster, and Paul Geller, representing the Sherwood High School
Cluster (©78-79) each supported the Bill to fund much needed public school construction
to
reduce
significant overcrowding in many County schools. Kerry Roth (©74) submitted written testimony
· opposing the Bill. Robert Goldman, representing the Montgomery Housing Partnership (©61-62),
supported the Bill to increase funding for the development of affordable housing in the County.
Mr.
Goldman suggested an amendment to change the allocation ofrevenue from the cost of County
government capital improvements to an allocation for any type of capital improvements, such as
public-private partnerships.
Many real estate professionals opposed the Bill because it would tax only buyers and sellers
of real property to fund capital projects that benefit all County residents. Jane Fairweather,
representing the Greater Bethesda Chamber of Commerce (©20-21), Peg Mancuso, Greater
Capital Area Association of Realtors (©22-25), Susann Haskins, Long and Foster Real Estate
(©29-38), Marty Stanton, KVS Title, LLC (©39-57), Nicola Whiteman, Apartment
&
Office
Building Association (©63-69), and Edward Krauze, Greater Capital Area Association of Realtors
(©70-73) each opposed the Bill. Several of these real estate professionals suggested the Council
fund the needed public school capital projects by increasing the property tax assessed against all
property owners. Robin Ficker opposed the Bill and argued that the State should increase its
funding for County public schools as the General Assembly recently did for Baltimore City.
2
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Issues
1.
What is the need to generate additional revenue for public school construction?
MCPS student enrollment has grown by 18,702 students since 2007. This year, MCPS is
using 381 relocatable classrooms to house 8,700 students. Student enrollment is expected to
increase by an additional 10,151 students by 2021-2022. Absent additional revenue, the current
backlog of school capacity projects and school revitalization/expansion projects is likely to fall
further behind. Both new home sales and home resales often contribute to this student enrollment
growth. County School Board President Michael Durso explained the need for additional funding
for school capital projects and listed the projects that are likely to be delayed without increased
funding in an April 29 letter at ©8-12. Many of the speakers at the public hearing testified about
different schools that were currently operating with many more students than the building was
designed for.
2. Should the recordation tax be increased
to
fund the Council's initial reconciliation of the
FYI 7-22 Capital Improvements Program?
The Council approved an initial reconciliation of the FYI 7-22 CIP to bring its programmed
spending within the approved spending levels and yet maintain an adequate reserve. The initial
reconciliation assumes an additional $196 million in revenue for the CIP over FYI 7-22. One way
to increase revenue for the CIP would be to increase the recordation
tax
dedicated to school
construction by $1/$500 instead of $.75/$500. The proposed rates for different values of
consideration on a conveyance is compared to the proposed rates under Bill 15-16 at ©7.
The Office of Management and Budget's Fiscal Impact Statement (©14-16) generally
confirms the revenue estimates made by the Bill's sponsor. OMB estimates that the Bill's rates
would increase revenue from the school increment by $125,975,000 over the next six years. By
analogy, if this rate were increased by $1/$500 instead, it would increase revenue by $167,967,000.
OMB projects that the Bill's proposed increase to the Recordation Tax Premium would generate
$64,959,000 over the next six years, to be split evenly between County Government CIP projects
and rental assistance.
Alternatively, as suggested by the realtors, the Council could raise virtually the same
amount of revenue by increasing the general property
tax.
The Department of Finance estimates
that an increase of 1.66¢/$100 in FYl 7 and continuing through the next six years would generate
the $196 million assumed in the April 26 initial reconciliation of the CIP. However, 8.4% of any
increase to the property tax must go to General Fund reserves, so the actual increase would have
to be 1.81¢/$100.
An
increase of2.09¢/$100 sustained through the next six years would generate
the $196 million for the CIP plus the $30 million the Bill would raise for rental assistance. A
variation of this option is to increase both the recordation
tax
and the property tax, but by lesser
amounts, in order to reach the $226 million objective ($196 million for the CIP, $30 million for
rental assistance).
3
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If
any or all of this increase is achieved by raising the property tax, it would appear in the
CIP as a combination of additional PAYOO and Current Revenue in each of the six years.
Although this additional property tax revenue would be used for its intended purpose in FYl 7,
history has shown that Executives and Councils often look to PAYOO and Current Revenue in the
CIP as resources to be mined to meet the exigencies of the Operating Budget.
If
(or, more likely,
when) that occurs, then funding for CIP projects, which depends upon a multi-year commitment,
is undercut.
3. How does the County's recordation tax rates compare to other Maryland Counties?
The chart below shows the current and proposed rates, and those of nearby counties in
Maryland. The chart expresses the rates in dollars/thousand dollars of home price or refinancing:
Jurisdiction
Montgomery (existing)
I
Montgomery (Bill 15-16)
Montgomery (Bill 15-16 with
higher school increment)
Frederick County
Carroll County
Howard County
Prince George's County
*First $50,000 exempt for owner-occupied.
**On amount over $500,000.
Rate
$6.90/$1,000*
$I 0.00/$1,000* *
$8.40/$1,000*
$13.00/$1,000**
$8.90/$1,000*
$13.50/$1,000**
$12.00/$1,000
$10.00/$1,000
$5.00/$1,000
$5.00/$1,000
Montgomery County's existing rate is higher than Howard and Prince George's Counties, and any
increase would create a greater differential. Comparisons to Carroll and Frederick Counties are
more nuanced, since Montgomery's rate differs due to the $50,000 exemption and the higher rate
over $500,000. For example, if Bill 15-16 were enacted with the higher school increment,
Montgomery's recordation tax would still be lower
than
Carroll's on home sales or refinancings
less than $750,000, and lower than Frederick's on home sales or refinancings less than $1,900,000.
4. Should the Bill be amended to clarify the application of the $50,000 exemption for an
owner-occupied home?
Scott Foncannon, Acting Chief of the Division of Finance and Procurement in the County
Attorney's Office, recommended an amendment to clarify the application of the $50,000
exemption for an owner-occupied home. See the Bill Review Memo at ©13. Mr. Foncannon
recommends the following amendment:
Amend lines 21-26 as follows:
(b)
Exemption.
The
first
$50,000 of the consideration payable on the conveyance of any
owner-occupied residential property is exempt from the recordation tax if the buyer
of that property is an individual and intends to use the property as the buyer's principal
4
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residence by actually occupying the residence for at least 7 months of the 12-month
period immediately after the property is conveyed.
The County has interpreted this provision to apply to a transfer
to
an individual and not a trust,
and this amendment would codify this interpretation.
Council staff recommendation:
approve the
requested amendment.
This packet contains:
Bill 15-16
Legislative Request Report
Council President Floreen April 12 Memorandum
Chart of Proposed Rates
Board President Durso April 29 letter
County Attorney Bill Review Memo
Fiscal and Economic Impact statement
Public Hearing Testimony
Jane Fairweather
Peg Mancuso
Lisa Seigel
Susann Haskins
Marty Stanton
Sally McCarthy
Joyce Breiner
Robert Goldman
Nicola Whiteman
Edward Krauze
Kerry Roth
Joseph Piff
Debby Orsak
Paul Geller
F:\LAW\BILLS\1615 Recordation Tax - Rates - Amendments\Worksession 5-12-16.Docx
Circle#
1
4
5
7
8
13
14
20
22
26
29
39
58
60
61
63
70
74
75
77
78
5
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Expedited Bill No.
15-16
Concerning: Recordation Tax - Rates -
Allocations - Amendments
Revised: April
14,
2016 Draft No.
L
Introduced:
April 19, 2016
Expires:
October 19, 2017
Enacted:
[date]
Executive:
[date signed]
Effective:
[date takes effect]
Sunset Date: --'-"N=on=e'---------
Ch.
Jtl_,
Laws of Mont. Co.
[year]
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President Floreen
AN EXPEDITED ACT
to:
(1)
(2)
(3)
increase the rate of the recordation tax levied under state law for certain transactions;
allocate the revenue received from the recordation
tax
for certain uses; and
generally amend the law governing the recordation
tax
By amending
Montgomery County Code .
Chapter 52, Taxation
Section 52-16B
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deleted.from existing
law
or the bill
by
amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL NO.
15-16
1
Sec. 1. Section 52-16B is amended as follows:
52-16B. Recordation Tax.
(a)
Rates.
The rates and the allocations of the recordation tax, levied under
2
3
4
5
6
[state law] Md. Tax-Property Code §§ 12-101 to 12-118, as amended, are:
(1)
[$3.45] for each $500 or fraction of$500 of consideration payable
or of the principal amount of the debt secured for an instrument of
writing, including the amount of any mortgage or deed of trust
assumed by a grantee;
7
8
9
IO
11
12
®
ml
(2)
$2.20, of which the net revenue must be reserved for and
allocated to the County general fund; and
$2.00, of which the net revenue must be reserved for and
allocated to the cost of capital improvements to schools; and
13
if the consideration payable or principal amount of debt secured
exceeds $500,000, an additional [$1.55] $2.30 for each $500 or
fraction of $500 of the amount over $500,000,1 of which the net
revenue must be reserved for and allocated equally to:
14
15
16
17
18
®
ml
the cost of County government capital improvements; and
rent assistance for low and moderate income households,
which must not be used to supplant any otherwise available
funds.
19
20
21
(b)
Exemption.
The first $50,000 of the consideration payable on the
22
conveyance of any owner-occupied residential property is exempt from
the recordation tax if the buyer ofthat property intends to use the property
as the buyer's principal residence by actually occupying the residence for
at least 7 months of the 12-month period immediately after the property
is conveyed.
23
24
25
26
27
Sec. 2. Prior allocations.
0
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ExPEDITED BILL NO.
15-16
1
The allocation of recordation tax revenue made in Section 1 replaces each
allocation of recordation tax revenue established in previously enacted uncodified
legislation.
Sec. 3. Expedited Effective Date.
2
3
4
5
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on the date on which it becomes
law, and applies to any transaction which occurs on or after July 1, 2016.
Approved:
6
7
8
9
Nancy Floreen, President, County Council
Date
10
Approved:
11
Isiah Leggett, County Executive
Date
12
This is a correct copy ofCouncil action.
13
Linda M. Lauer, Clerk of the Council
Date
0
f:'Jaw\bills\1615 recordation tax - rates - amendments\bill 4.docx
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LEGISLATIVE REQUEST REPORT
Expedited Bill 15-16
Recordation Tax
-
Rates -Allocations
-
Amendments
DESCRIPTION:
Expedited Bill 15-16 would increase the recordation
tax
rates and
allocate the revenue received from the recordation
tax.
The portion of
the base rate allocated to school capital projects would increase from
$1.25/$500 to $2.00/$500 of value, effective July 1, 2016. The Bill
would also increase the premium rate charged against sales valued at
more than $500,000 from $1.55/$500 to $2.30/$500. The revenue
received from this premium rate would continue to be shared equally
between County capital projects and rent assistance.
The County needs to generate additional
tax
revenue to support MCPS
school construction and rent assistance for low and moderate income
households
in
the County.
Increased funding for MCPS school construction and rent assistance
for low and moderate income households in the County.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, Senior Legislative Attorney
To be researched.
Not applicable.
F:\LAW\BILLS\1615 Recordation Tax - Rates - Amendments\LRR.Docx
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MONTGOMERY COUNTY COUNCIL
ROCKVILLE, MARYLAND
NANCY FLOREEN
COUNCIL PRESIDENT
MEMORANDUM
April 12, 2016
TO:
FROM:
SUBJECT:
Nancy Fl+
Councilmembers
President
Proposed increase to the recordation tax
As
I
talk
with residents across the county, it becomes increasingly clear to me that our
capital needs, particularly in the areas of school construction and affordable housing, far outweigh
our available resources. Times are tough to be sure, but we absolutely must keep up with our
obligations in these two important areas. That's why I will introduce a bill to increase the rate of
the recordation tax in a progressive way. The recordation
tax
is paid only when properties are sold
or refinanced. While nobody likes the idea of increasing taxes of any kind, our needs are great,
and this tax is less likely to affect those Montgomery County residents who are struggling most.
On the up side, it will generate millions of dollars to support our desperate need for new schools
and educational facility improvements. What's more, a portion of the recordation tax is earmarked
for affordable housing. I believe this proposal is the most progressive approach to meeting the
needs that our residents have clearly identified as their top priorities.
The attached expedited bill will raise both the School Increment of the Recordation Tax
and the Recordation Tax Premium by $0.75/$500 each. Over the six-year period these rates will
generate an estimated $15
5
million more in revenue for the CIP and $30 million more for rental
assistance for low and moderate income households.
There are three elements of the recordation tax:
The "base" recordation rate is $2.20/$500 on the sale price or,
if
refmancing, on the
additional amount borrowed over the remaining principal.
(If
acquiring a home, the first
$50,000 of the sale cost is exempt.)
This
bill does not change the "base" rate or how its
revenue
is
allocated.
The "school increment" went into effect in 2004 and
its
rate is $1.25/$500.
It
is also based
on the sale price or,
if
refinancing, on the additional amount borrowed over the remaining
principal. This bill would raise the rate to $2.00/$500, effective July 1, and would
generate $125 million over the next six years. Currently the proceeds can be used for any
Montgomery County Public Schools capital project and for any Montgomery College
100 MARYLAND AVENUE, 6TH FLOOR •
ROCKVILLE, MARYLAND 20850
240n77-7959 • FAX 24on77-7989 • COUNCILMEMBER.FLOREEN@MONTGOMERYCOUNTYMD.GOV
t~
PRINTED ON RECYCLED PAPER
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information technology capital project. This bill would dedicate all the proceeds to
MCPS projects; College information technology projects can be funded with general
Current Revenue.
The "Recordation Tax Premium" went into effect in 2008 and its rate is $1.5 5/$500. Unlike
the other two elements, the Premium applies only to the cost of a property or a refinancing
that is in excess of $500,000. Half of the proceeds from the Premium are allocated to
County Government capital projects (i.e., capital projects of departments in the Executive
Branch); the other half is for rent assistance. This bill would raise the rate to $2.30/$500,
effective July 1, and would generate $30 million more for County Government
projects and $30 million more for rental assistance over the next six years.
On
March
22 the Council heard from Enterprise Community Partners about the need for more
affordable housing in Montgomery County and that part of the solution is more money.
The Recordation Tax Premium is an important revenue source for the Housing Initiative
Fund.
It
has
been used for traditional monthly rental assistance and very effectively at the
Bonifant to make many of these new units affordable to very low income seniors. The
Department of Housing and Community Affairs has projects in the pipeline that may need
$40 to $50 million. This funding will help make sure there is adequate funding to move
forward when projects and programs are ready.
Raising the two rates maintains a degree of progressivity in the recordation tax. The chart
below shows what the burden of the total recordation tax (i.e.,
all three
elements) would be for
homes
at
different sale prices:
Current Rates
$1,725
$2,415
$3,105
$4,105
$5,105
$6,105
$7,105
$8,105
$9,105
$10,105
$11,105
$12,105
$13,105
Proposed Rates
$2,100
$2,940
$3,780
$5,080
$6,380
$7,680
$8,980
$10,280
$11,580
$12,880
$14,180
$15,480
$16,780
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
$1,500,000
2
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Increase Recordation Tax School Increment b:y
SO. 75[S500
fSl.50[~1000}
and Recordation Tax Premium b:y
SO. 75LS500 (Sl.50[$1000)
(Generates
$155M
for CIP and
$30M
for rental assistance in
6
years)
Consideration
Current Rates
ProQosed Rates
Increase
$
$
$
$
$
$
$
$
$
$
$
$
$
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
$
$
$
$
$
$
$
$
$
$
$
$
$
1,725
2,415
3,105
4,105
5,105
6,105
7,105
8,105
9,105
10,105
11,105
12,105
13,105
$
$
$
$
$
$
$
$
$
$
$
$
$
2,100
2,940
3,780
5,080
6,380
7,680
8,980
10,280
11,580
12,880
14,180
15,480
16,780
$
$
$
$
$
$
$
$
$
$
$
$
$
375
525
675
975
1,275
1,575
1,875
2,175
2,475
2,775
3,075
3,375
3,675
Increase Recordation Tax School Increment b:y
Sl.00/$500 {Sl.50/$1000)
and Recordation Tax Premium b:y
~O.
75[$500 {$1.50LS1000)
(Generates
$196M
for CIP and
$30M
for rental assistance in 6 years)
Consideration
Current Rates
ProQosed Rates
Increase
$
$
$
$
$
$
$
$
$
$
$
$
$
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
$
$
$
$
$
$
$
$
$
$
$
$
$
1,725
2,415
3,105
4,105
5,105
6,105
7,105
8,105
9,105
10,105
11,105
12,105
13,105
$
$
$
$
$
$
$
$
$
$
$
$
$
2,225
3,115
4,005
5,355
6,705
8,055
9,405
10,755
12,105
13,455
14,805
16,155
17,505
$
$
$
$
$
$
$
$
$
$
$
$
$
500
700
900
1,250
1,600
1,950
2,300
2,650
3,000
3,350
3,700
4,050
4,400
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MONTGOMERY
COUNTY
BOARD OF
EDUCATION
850 Hungerford Drive+ R:oom 123 +Rockville,
Maryland 20850
I/
The.
Honorable
Nanoy Floreen,
President
Montgomery
County· Council
Stella B.
Werner
CQunciI
Office
Building
100 Maryland Avenue
Rookvil~? M~l~ncl
20850
Dear
Ms;
.FJoreen:
Malcolm
~~~onal
utrAwaru
Qu..
B~ldrige
21111!
Award
Redpfenf
On. beha:lfof
th~
Board
of
Education~
we ,greatly
appreciate
the
l11troducti011
ofExpedited Hill
l
S~
16
that
Woqid
incn;mse
the
scnool
increln.Cllt of
the
county R,eoorqatiQn
Tax,
.frQltl
$1.25/$500
to
$2,00/$500
on the sales
price
of
homes_
We
understand
that
this. bi11 al.st:> will
dedicate
all
of
this
revenue to
Montgom~ryCountyPublfoSchoo1s
(l\!CPS}
capital
projects.
Th.Badditional $,125 million
over die six-year peripd will
help
Nid~s
the
b1:1;Ckfog ·
of school
capacity
projects,
revitaliz~tlon/expansiotL projects~
as
well
f1S·
fund. our
systetnwide :systemie
projects. Collecting
addi#onal revenue
froni
ttiis tax niake& sense s.ince th.e 1ttrnoV,er
of
exJs.ting hpusing units; as well as
firs:t~time
home sales,
results
in
signtfi~t
enrolbneJ,it
lncreQ$:s
for
MCP$. 1 b¢liev!3 this
iS
an
;opportune
time
to raise the
Record~tiofl.
Tax
in
light
of
the
strOJlg
housingmark~t.
the magnitude .of
enroUmetit
iner~aset;
ahd
thf.'l backlog
of
school
ca~ity .prpje~ts.
I
alSP
beUeve
lbe
time
i~
now to
cot1$:ider
increases
in
th~
School
Impact
tax:
MUitipl~ fner~ses
in
revenue
so1.u:oes
are
ctiticaf
to
a(idress .the
chalteng~s
facing our school
system'<S
facilities.
Si11ee
2007,
enro!lm~l)t
pas
increased
by
1~7-02 s~udents,. Despit~
this
·opening
o,fa
number
ofnew
S»bools,
addition
ptoj~ts~
and
revitalization/expansions,
sinoe 2007,
'1nany
of
our schoQls continue
to
aw~it
funding for tbelr. capita.I projects;
This
y~art
J81
reJocat~.ble
classrooms are in use, housing
approximately
8~
700 students, Withoutan
infusion.
-0f new
revenue,
this situation only
wm
worsen as
enrollrnenlis prqjected to
inct~se
by an
additi~naUO,lS
lstudents
Qy20.21-2022.
Many
of
the t1eeded
capacizy pmjects ·have been designed
1
are
4
<Shov.el-ready," and
simp~y
await funding.
In
my
Jetter ofAprii 4, .2016,
Iprovided:you
with the
enotosed.iistofnon-twommended
reductions to
the
Boord of
Education's
Requested FY 21J17 Capital Budget and FY
2:017~2022
Capital
lrnprr>Veme.nts
Program
(
CIP)
th~t
woitld
be
:requited
to
address the
$160;2
million
shortfall.
ba$ed
on
the county ex.ecutive.'s
reoommended CIP, lt
is
imp01tant
to
note
that
the Board's requested CIP, at
$
L728 billion, did not
)nctud.e
all
th¢
projects
nt~
for
out
pr.t?jec~
spa,c¢. deflcfts and alsci did
rtot.adeqWJteltfuna our vital
sysrerni:cpr¢jects,
Th~
add.it.tonal
$12Smillion
generated
by approval of
Bill 15-16 would be a major step toward
etosrng
the
funding
gap.
f1)r
scho.ofmcility
needs.
Phone SQ1-279-Jfi17
+
fax' 301-279-3860 •
boe@mc;psmd.<>rg
+
WWw.mootgomeryscht>Qfsmd;org
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The,
Board
of
E~u®on
appreciateS yout
cornmftmeJtt
to
the
schooJ,s
ofMontgQmery
County
to
consider the
incr~
in·
the
school
increment of
the
~dation
Tax
tp
fun.d
our Coµnty•s
011p.it.al
needs~
If.you.have
any questions, please contao.tDr. Andrew M. Zuckerman, chief
op.erating
officer,
,at
JQ
1""279-3627
oi: Mr. Jam¢$
Song.
dlr~r;
Qep11rttnent
Qf
Faciliti()iManaJ<mr®t•
~Jl40,,:n 4~1064,
;rjltf?
MiohaelA.
Durso
Pr~si®nt·
MAD:AMZ:alk
Enclosure
Copy
to:
Metnlle.rs of.the C®nty Council
M~l>ei:s
o:£theBoard
~fEducation
Mr. B()wers
Dr.
Zuekerman
Mr.Edwards
Mr, Song
Mr. llchel<>a
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Enclosv~
Countilmallic Districts:
Impact of. Non-Recommended Re:ducti.C:ms on Capital Prc>je.cts
!=Y
2..017~22.
Capital
~mprovements
Program
District
1
Board
of
EdUC<lt{op's
Requested
coltl.i"etTon
kho.ol
Project
Type
Uate·
8/16
,
.,..
Non"Recommended
Re.Sµttfon
Completion
Date
Cht.irehlll. High
l
--
Poolesville High sthoOI
Schoof
;z
g
Thomas
Win~toq
PLAR-Rug:nlrigTri!!tk
~esurfa¢e
..
8/17
8/24
8/21
Revftalization/EXpansion
Addition
....
w.
PV)e.Mlddie
Sch.oat
8/i.a
'8/iO
8/17
_4_
'.!J'i91l1<ils
W.
P.,Jel\lllddl~
Scbpol
s
wait
Whft~nflign
School
·
eplai;~ment
ttltm
S/1&
8/22
'.~
8/20
District 2
Board
of
Edi.lcatloQ'S
Requested
Nofl-R~ti'!~pnded
~!Wl.4£f;lon
Completion
Project Type.
!late:
Completion
Date
HVACRe¢acement
Pha~
I
8/17
8/18
8/18
TBO
2 John T. Baker Mlddle Schl)QI
1-!VAC:Replatement
Phase
II
Nm\/
Schoof
PlAR-Gym Ffoor
Repl~cement
8/19
$/16
8/i1
8/17
P.L!\R-EmergencvG.~rel'amr
-·-----+---s"-/l'"'J>_ _-+------'8/'-1_7._ _
-i
. .?.. .
~~.P.!.!!!'.}!!T~~-~JY..~~~.l'.l!!!Y:.~~~~~
............___
~--- ELA_R-_E_m_e_rg~e_nc~y_G_e_n_er_at_or_·
------r----8./_·
---1---811_-_1 _""'""'"'
16_·
_
1
Dtiflef
El~mentary
Schaol
Ri!\f!talbitt~n/aq>a_nslon
&/21
~ri.2
8
Damascus
Elementary.School
'-;To'amascustilgh School
R~ltaliz:ation/E!(panSl()n
HVACRepl;icerne~
1/23
8/17
f/24
8/18
~hen E~ntaryschoof
IEJ~artlo
lt¢her'klng,
Jr.
Middle
SChoot
12.
PlAR-G\tmFloor RAAlacement.
PI.AR-Paint
(lrrterlor
&
E!Xterfor}
Roof
Replacement
8/16
8/17
8/11
8/18
TBP
Dt.
$ally.
It
Ride .Elementary
S~-~~!
_______........-.....
$/1$
8/18
8/18
13 t.ols P. Rockwell Elementary
School
14 Strawberty KnQll
HVAC
Replacement
IHVAC
Repla_cement
TBD
TBD.
EJamenta;y
$s:bool
15 Watkfns
Milll~Je~51i:•I:.5-~~~~---~~~-1-P~AR-Walk..fn
Rehigeratorflepfaceme.nt
16 W-atldl'!s Mtl1
t:ltstlSchool
~
HOO~
lmprQ\!ements
8/17
8/17
8/11
~·8'-/18~·---1
8/18
_Q.~
s
Mill
High Sc.hoo.I
·
entary
Sthocil
19 Woodfteld'Elementary StMPl
18
lwhetst
~R,-Biidge
Walkway skvlightReplaeemeht
8/18
8/18
Pl.AR·-COm:;tete
Walkway Reptaeem_e_nt _ _ _ _
S_:./_17----+---'--1!~1
_
HVACReplacem~..!_
.....- - __
8/17
•WA
liidltates all
exl'l!tu.llhm.~s
removed from the requeSfud
ClP and
wm
be reoonsldered for funding In. a:futtire CIP
request.
• -rao
Indicates countywlde
systemk
proJects
that
are not
Included In
ttlt.
first
two
years
oUhe:
CIP
ar.e teJN!iJuated for a..completli;m
date
i\'I
the
m:i<t
OP;
1
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Coundlmanic Disttitts
llt'lpatt
of
Non-R~mnu~l')~~4
Re,<Juctions
on
C:~pltal
Pt-0.iects
f'/20l7-.ZQ2Z
(:apitaJ JmprovemEH\ts
Program
District
3
Boatdof
Educatfol'l*I
Non-ftocomme~d
Req!J8Sted
Red~
Completion
Slihoot
1
Tfu>mtis
S.Woottan Hlgh SchOcil
Pr~~
Type
P>mpfetton
Date'
Pate
:S/21
8/16
Revltal!Zatit>l'lftxpanslon
2 O:ild
Sprfi!!t~~pe"-.
·'-nta-'-ry...:.
oo-'-·'-'1
-------1-Re-'.""yita_._Uz~a_tl
.....
. ··_;_s_ch_.
on""/~Ex_,_p~an_s_lo..,..n
_ _ _ _ _ _ _
-+-_ _
:8-'/2~.l_··
1-3_··+-R_o_be_rt""'.
fr_..os_•=J'-'M_ld-'-'·~~le._.Sch_··~oo_I-~i-----~+Pl.A_··_.·
~-:;-Asphaltf!Ja.sketbalJ)
4 R«!Wlil- High Scttopl
Rdof
.Rep!~~ent
S/18
S
'.rwinhrookl::lementary
School
RtWitailzatH.>n/ExpaM!on
Revitalizatlon/Expansk:m
1/23
1/23
1{24
6 Sumlt\ft Hall
Ellll~ntary
School
1/24
DJsttict4
Board
Of
'$chool
PrQjett
Type
Education's
Requeirted
COf'!lP!f;ltiOft
.
Date
Npn..ftecomirteof.!ed.
RQdu~lon
~i;npl~!On
OBUI
8/22
.i
2
.~lrri9r1l El~etjta,i'y
Sthool
.
Revltalilatlon{El!patislort:
8/21
.~-'...c:.-'--'-~--~--+----'-'c:...:._---4---
H\IAC'~eplacement
'Srool<e
Grove
Elementary Stllool
8/17
8118
8/17
1-'':'-$-+F~lower
....
·.-·_·.•-"'H-"-ill_E~le"""m_,_.·!!-'n}a'"""
"-Sc""'·="oo-''-'-1---'-----...J.C;H._V,'A
c_Rep-'·
.
tre_m...:..e..:..:.n_t_ _ _ _ _ _ _ _
- , f_ _ _
.
1_,rv·
..-'
__ _la"-
s...:../....:l'IJ_~-+--....:T.~BD'~
_ __,
_4·--~t-F_lo'-w_er_H_l_IJ-'El'-eme-':~ot_
*f'/_
_S-c._..h.....;®
J
..
..
.....
______
PlAR~Emersency.Genera-tPr
HVACR~plac»meot
s.
Geargltm
FOrest Elementary
Schi)()......
-'-'-'---'-~+~-_R_e"""p-~a
..... m.;,.;..
_t_ _ _ _ _ _ _ _
1--_ _
8;,.;.J'-.1~8---+---T_B_a_.-~
I
ce_m_i
a/17
'ti/17
&/16
6 laytpnsvHl!tElementarvSc::h®I
1
U!YtOf\SVllle
.Elementary
School
l3/18
8/18
8JZ1
Pl.AR'-Window
R~placement.
·B·
ColdtB.tpo~eleeMiddleSthool
Addltioo
8/20
"'NIA
ln.dlqlt.1!$ all
e~nqltvres re~
from.
the
ri!q\jested CIP arid will he
reconstdl!ted forfundlll$.
In
ii
futut:e
Ql'
reqµest,
liTslflndlc:ate~ t,o.uot\'Wlde.sv~emic
prOjects
tllat
ar&
nOt
lriclUdl!d ln
lbi!
llr$1:
\wi:fyeats
oft
he
CtP
<ire
tiieValuated
:wr
a
cpmpletldn
din!!
in
~.
ne1<1:.
CIP.
2
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Enclosure
Cou~ctlmaoit
Distrit;ts
Impact cf Non•Recommended
Reductions
on Capital
Prqjecb
FY 2017-202i
Capital
lmpro\remerits
Pr<>iram
District S
.BOardc>f
Education's
Requested
Non•Recommended
COfilpletJon
Date
Reduction
Completion
Date
TBO
HVAC
Repiacement
8/18
TBO
N/A
$111
AddJtlat1
PLAR-Emergenny
Generator
8/20
8/16
Addition
MH
8'/20
<>.Wo>.,'.W""~~U,._;,..,.,
. . . ;,,,;,_,, _ _ _
NIA
, _ _ _ , _ _ ,,_.
6
JoAl'irt
Lelee.k
Etementat:Y Sci'loQI
at
Btoatf
A.ere$ .
RoofReplar:ement
,, ..
•"c• ,,;.,,.,._,. __
•-•••·-·-··--·------·-·~N'~•·••••••••••·-··-·••••••••••••••f•rn"
H
,,,,,.,""'>"••~-·--.;,
..._..__,,,,,,...,,_,_.,,.,,,._,,.. •••••••••••••·" ,.,. . .,,,..,,: ____ ,,_.. _ _ _ _ _., ______ ,...,.,_,,.. ,..,,.,
B/17
8/18.
7
M~ntgoflleryKnQ.l!s.
Eli!!in!ilfl¥i!v$ctl991
A®ltton
a/20
i
8/22
TBD
8/22
i/20
1u~nec~~~~ntary~~•.~0o;.;;.;_l
_____
__,~A~ddlt10~· ------~~~~-1---...z...::;;_~~ii----..;.;.l.~--i
~··~n~·
ey Brahth flement?ry Sch()ol
Addition
s MontRomen:
Kriollll
Efern~tarv
St:hool
9
Neow Hampshire
Estate$ Efemeritary
School
HVAC
Replacement
tJVAC
Replacement
8/13
8/17
8/18.
S/21
8/43
12
Ros~li'Y
Hills Elem_·
e_n_ta_ry~·-Schoo~.
-----+Re""'".
_vit~•
-'~·
:allzatlOn/El<panston
BUUdlng
Mpdtfii:atkms
andf.!f'.Ogram
1113
1lZ4
13
sttve.r.
:?er!~
.
~J!l_!e.
rnatlOf!
'!~~.·1~i;1,1.~
.
~~~!-
.......
!~P~?!t:~_!l~:
-·····-·· .......
.
.
ko:flla i>arl<
Mid~ ~h®f
Addltl()lt
odllp
Elesnentary
S<:boor
. .
.
···- .......................
YAt~-·-····--·-.
__
.... .
N/.J!_
8/2'J
8/2"1
8/18
16 Wbodlln
Elemen:tarv.
School
PlAR-ffoor Covering
Replitement
Additron
8JJ.7
a/20
N/A
'"N/A. lnd.fj:aten11
l!?l~end!tures.
i'emoved
from the teqµei;ted ·Cl!'
em·
will
be reconsti!ereiHorf\iridln8 In.a
f11ture CIJ>
r4quest;
....1'8.D
lndJeat!.!~.
l;Ol!l'liWtlde
~It
p('()Je<:l$
.thatate
llOt
lnl;lilde1.f
Jil
tl:te
first
twe
~·ofth~
CJ)>
~re
r.eevaluated for a comi>letion
dil.tl!
In
the
next
CIP.
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OFFICE OF
•111E COUNTY
AITORNEY
Isiah
.J..
¢1Sett.
Ctiunty,1£Uifutwe.
Marc
P.
Hansen
~1l1JfyAttgr1Jey
to:
Jq~hBeac~ 1,)i~
Departmentoi.Firumee
Stqtt .
R..FoiJ.cannOli;Acting Chief
Dinsion efFmance and
Procur~ent
VIA:
Ed.wat:d B.
Lattner,
Chier·
~
Pivisk>nof()Q~1:Pt Qper~;IJons
.April
22~
2.0JC>
·Rlk
Bill
15'."l()E.
~dation'fax·--'.&lte~--"-All~ons.
- Am¢.I14roent$
I
l@ve.~
an
oppQrtiinity
to~view Ex~i~
Bill
15-16~.R.eeordatidn'fax
,,..,Rat<'s-
Allooati<>ns -Ame11dments.
This
bill
incrmes
the
rares.of
:recordation
tax
and
modifies
the·
i:lUei~on
af
the
~eordation ~ impo~d.
This
biJJis
~uth()r~by S~t~ la-W·~is
vvithirt
the
a.uth<>rit)'
9.ftbe
CQrUit,y
CoW\dt
'Ille bill l$
notvaga.e~.
WiU
nat
inure$
or decrease
the
Cknmty':Jliabi}ity
.~posure.
and,.
in
my
opinion, the.bill· is.constitutional
Ovet the
years.there
have
been
issues
with
the provisions
of52-
l
6(b).
This
~tiQn
creates·
an
exemption tor
the
nr~t
$Sth00Q
ofco.nsideration on a
conveyance
of
O'A~ner
occilpied
r~~tial
pr(JpeJ;'.tY
wh~rethe
buyer
itltends to use the pi:operty as
the
buyer's
principal
residence
fQt7
.out.
tJfthe
12,moI)ths
immedl.a:tdy.
ft#er
the property
is conveyed. 'fhis has always
been
int~~
byt1Je,
c;ou,p.ty
to
only
l!pply
u,
a transfer to
an
indiV:idual
and not to
a transfer
to
a
tl'USf,
l
would
teoommend
that an
amertdment
be
proposed
in
line
23
so
that
this exerripdon
read!$,~~
...
if
the
~yerqftbatp~y
is
an.individual and intends to use the property•••.
'~
With
tlie.
ainendIIient
of
1ltls
~iGn
ufthe County
Code,
ii
will
become
clear that
the exemption
applies only
t{)
an individual buyer·and.not
to
trarl$fers
to
a
trust.
BlU~w
i~'"®29$3
iai~•me ~~~11I~~13lld 2~850..25~0
·
(~}.777-5V95·m).(24(}) 11r~?n$•F~ (2¢()1777-6~
~(Qn~rij)OOrt~~n~.~v
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Fiscal Impact Statement
Bill 15-16E, Recordatron Tax .... Rates
-Allocation -
Amendments
1. Legislative
Summary:
This legislation would increase the rate of the recordatlon
tax
levied
by
the County
under state
law
and allocate the revenue received from
the
reoordatfon
tax
for dill:erent
uses. Recordaticm taxes are imposed on the privilege of recording a document among
the land records of the County and they are paid when real property is transferred, when
the mortgage on real property is refinanced, or when any other inStrument of writing
securing a debt is recorded.
Th.ere are three separate recordation tax rates. The first rate, or base rate, is $2.20 per
$500 of the consideration in a deed
or,
if
mortgage
refinancing,
on the additional amount
of
the debt secured above the existing principle balance. This rate translated into a
percentage is 0.44
percent.
For
purposes of calculating the recordation tax on a deed,
the first $50,000 of the consideration amount
is
.exempt from the
tax if
the transaction
pertains to a buyer of owner-occupied residential property. Bill 15-16 does not change
the base rate.
The second rate, or school increment, is $1.25 per $500 of the consideration and went
into effect in 2004. The rate is based on the same criteria as the base rate. Bill 15-16
proposes to raise the rate from $1.25 per $500 to $2.00 per $500- an increase of sixty
percent (60%). These rates translated into a percentage is an increase from 0.25 percent
to 0.40 percent. Bill 15-16 would dedicate all proceeds from the rate increase to
Montgomery County Public Schools capital projects.
The third
rate~
or the Recordation Tax Premium
t'premium''),
is $1.55 per $500 and
went into effect in 2008. The "premium" tax is applied when the consideration is a deed
or a mortgage refinancing in excess of $500,000.
Fifty
percent (50%) of the premium
funds County Government capital projects and fifty percent (50%) funds rent assistance.
Bill 15-16 proposes
to
raise the premium rate from
$
l.55 per $500 to $2.30 per $500 -
an
increase of over
forty-eight
percent (48.4%). These rates expended as a percentage
would
increase
from 0.31 percent to 0.46 percent.
2. An estimate of changes
in
County revenues and
expenditures
regardless of
whether
the revenues
or
expenditures are assumed in the
recommended
or approved budget.
Includes
sour~e
of information, assumptions, and methodologies
used.
'Ibe
Department of Finance (Finance) confinns the fiscal
impact
from Bill 15-16 as
estimated
by
County Council staff of $125.975 million for the school increment and
$64.959 million for the
Hpremium"
that are based on the percent increases in the second
and third rates to the revenue forecasts for the School CIP and the premium submitted in
the County Executive's FYI 7 Recommended Capital Budget. Finance assumes that the
revenue forecasts prepared
by
County Council staff do not affect the economic
assumptions for residential and non-residential transactions prepared for the County
Executive's FYI 7 Recommended Capital Budget.
In
other words, that the increase
in
the
rate schedule 'Will have no material behavioral
impact
on the number and amount of
transactions subject to the reco.rdation tax.
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3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
The estimaied additional revenues from the increase
in
the school increment are
$125.975
mil1ion from
FY2017
to FY2022. The estimated
additional
revenues from the increase in
the "premium" are $64.959 million
from
FY2017
to
FY2022. The estimated revenues by
fiscal
year
are
as follows:
School incremental increase:
o
FY17: +$18. 712 million
o FY18:
+$19.369
million
o
FY19:
+$20.368 million
o
FY20:
+$20.893 million
o
FY21:
+$22.536 million
o
FY22: +$24.097
million
Premium increase:
o FYl 7: +$9.649
million
o
FY18: +$9.987
million
o
FY19: +$10.503
million
o
o
FY20: +$10.773 million
o
FY21: +$11.620
million
FY22: +$12.427
million
4. An actuarial analysis
through the entire
amortization
period for each bill that would
affect
retiree
pension or group insurance costs.
Not applicable
5. An estimate of
expenditures related
to
County's
information
technology (IT)
systems, including Enterprise Resource Planning (ERP) systems.
There are no additional expenditures related
to
the
County's information (IT) systems
including ERP.
6. Later actions that may
affect
future revenue and expenditures
if
the bill authorizes
future
spending.
Finance, which administers this tax, does not expect later actions that may affect future
revenue and expenditures.
7. An estimate of the staff time needed to implement the bill.
There is no additional
staff
time required of Finance
to
implement Bill 15-16.
8.
An
explanation of how the addition of new staff responsibilities would affect other
duties.
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Not applicable
9.
An
estimate of costs when an additional appropriation is needed.
Not applicable
10. A description of any
variable that could affect revenue and cost estimates.
As noted in item
#2
1
the revenue estimates are
ba~ed
on economic assumptions prepared
for the County Executive's FYl 7 Recommended Capital Budget. However, there may be
instances where the higher recordation tax, and therefore higher closing cost, could have
an impact on the sale or sales price of a property.
11. Ranges of revenue or expenditures that are uncertain or difficult to project.
Because the estimates prepared for Bill 15-16 are a six-year forecast, there are always
uncertainty with any forecasts of revenues whether in the short- or long-term.
12.
If
a bill is likely to have no fIScal impact,
why
that
is
the case.
Bill 15-16
V\<ill
have a fiscal impact
13. Other fiscal impacts or comments.
Not applicable
The follmving contributed to and concurred
with
this analysis:
David Platt, Mike Coveyou, and Rob Hagedoom, Finance
Jane Mukira, Mary Beck, OMB
Date
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Economic Impact Statement
Bill 1S..16E, Recordation Tax -Rates -Allocations - Amendments
.Background:
This legislation would increase the rate of the recordation tax levied
by
the County under
state law and allocate the revenue received from the recordation tax for different uses.
Recordation taxes are imposed on the privilege of recording a document among the land
records.
of the County and
they are
usually paid
when real property
is tr&nSferred,
if
the
mortgage on real property is refinanced, or
if
any
other instrument of \\-nting securing a
debt is recorded.
There are three separate recordation tax rates. The first rate, or base rate, is $2.20 per
$500 of the consideration in a deed or,
if
mortgage refinancing, on the additional amount
of the debt secured above the existing principle balance. This rate trdilSlated into a
percentage is
0.44
percent. For purposes of calculating the recordation
tax
on
a deed, the
first $50,000 of the consideration amount is exempt from the
tax
if
the transaction
pertains
to.
a buyer of owner-occupied residential property. Bill 15-16 does not change
the base rate.
The second rate, or school increment, is $1.25 per $500 of the consideration and went
into effa."1 in 2004. The rate is based on the same criteria as the base rate. Bill
15~
16
proposes to raise
the
rate from $1.25 per $500 to $2.00 per $500 - an
increase
of sixty
percent
(60%). These rates
translated
into a percentage
is
an
increase from 0.25 percent
to 0.40 percent. Bill 15-16 would dedicate all proceeds from the rate increase to
Montgomery County Public Schools capital projects.
The third rate, or the Recordation Tax Premium ("premium"), is $1.55 per $500 and went
into effect in 2008. The '"premium" tax is applied when the consideration is a deed or a
mortgage refinancing in excess of$500,000.
Fifty
percent (50%) of the premium fund
Coµncy Government capital projects and fifty percent (50%) fund rent assistance. Bill
15-16 proposes to raise the premium rate from $1.55 per $500 to $2.30 per $500 an
increase of over
forty-eight
percent (
48.4%).
These rates translated
into
a percentage is
an increase fro:n 0.31 percent to 0.46 percent.
1. The sources of information, assumptions, and
01ethodologies
used.
Sources of information used in the preparation of the economic impact staten1ent are:
• Greater Capital Area Association of Realtors
(GCAAR),
• Maryland
Association of Realtors
(M.A.R),
• "The Behavioral Response
to
Housing Transfer Taxes: Evidence from a
Notched Change
in
D.C. Policy", Working
Papl'l',
Joel Slemrod,
et
al.,
February 2016,
• "The effects of land transfer taxes on real estate estimate markets:
Evidence from a natural
l'Xperiment
in Toronto", Working Paper423,
Department of Economics, University of
Toronto,
February 14, 201
J,
and
• ""Potential Impacts of Increases in Real Estate Transfer
Taxes,·~
National
Association of Realtors. 2003.
Page 1 of3 ,
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Economic Impact Statement
Bill 15·16E, Recordation Tax - Rates -Allocations -Amendments
TI1e Department ofFinam..
-:e
(Finance) confimis that the increase in revenues from Bill
15-16 as estimated by County Council
staff
is based on the percent increases in the
second and third rates to the revenue foreLclsts for the School CIP and the premium
sub1nitted in the County Executive's FY17 Recommended Capital Budget. Finance
a.-;sumes that the revenue forecasts prepared
by
County Council staff do not affect the
economic asswnptions for residential and non-residential transactions prepared for
the County Executive's FYI 7 Recommended Capital Budget. In
0th.er
words, that the
increase in the rate schedule
\\ill
have no
material behavioral
impact on the number
and amount of tnmsactions
subject
to the recordation tax.
2. A description of any
variable
that could affect the economic impact estimates.
.The variables that could affect the t.-conomic impru::t estimates arc the responses to
real estate transactions and the real estate market, both sales
an.d
sales
.
prices. from the
increase in both the school increment rate of sixty percent and
the
premium of over
forty-eight
percent. Specifically,
the
proposed rates would increase the closing costs
to
both buyers and sellers.
.
3. The Bill's positive or negative effect, if any on employment, spending, savings,
investment, incomes, and property values in the County.
Finance
estimates
that the
dosing
costs
from
both recordation and transfer taxes for
selected residential sales would increase from $300 for a sales price of $250,000, or
21.7 percent. to $2,175 for a sales price of $1 million, or 26.8 percent. For non-
rcsid<.,"Iltial properties, the closing cost would increase $375 for commercial properties
with
a sales price of $250,000, or
21
.7 percent,
to
$149,250, or 29.9 percent, for
commercial properties with a sales price of $50
million.
Based on those estimates, the average effective
tax
rate for residential sales would
increase from
055
percent to
0.67
percent for
property
with a sales price of
$250,000
and
from
0.81 percent to 1.03 percent for property \Vi.th a sales price of$1 million.
The effective
tax
rate for non-residential sales would increase from 1.00 percent to
1.30 percent for properties with a sales price of $50 million. This also confim1s that
the recordation
taxes
are progressive in terms of sales prices under both current and
proposed
rates.
While Bill 15-16 will increase the closing costs for both residential and non-
residential transactions,
the
legislation would
have no
impact
on
employment.
savings, and non-real estate investment, and incomes in the County. However, the
cffoct of an increase in the closing costs could have a modest impact on real estate
sales
and property values. Without historical County
data
on the responses of real
estate
transactions to rate increases, estimates of such increases on
the
number a11d
value of transactions is difficult
to
measure with any specificity.
Page 2 of3
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Economic Impact Statement
Bill 15-16E, Recordation Tax - Rates - Allocations - Amendments
4.
If
a Bill is
likely
to have no economic impact,
why
is that the case?
Bill 15-16 could have a modest impact on sales prices and number of residential and
non-residential transactions but no impact on the
Comity's
employment, savings,
investment. and incomes,
5. The following contributed
to
or
c.oncurred
with this analysis: David Platt and
Robert Hagedoorn, Finance.
Page3 of3
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(
THE
GREATER
BETHESDA-CHEVY CHASE
CHAMBER OF COMMERCE
7910 Woodmont Avenue, Suite 1204
Bethesda, MD 20814
T:
{301) 652-4900
F: {301) 657-1973
staff@bccchamber.org
www.bccchamber.org
Your Business Is
Our Onlv Business
J
THE GREATER BETHESDA CHAMBER OF COMMERCE
TESTIMONY BY JANEFAIRWEATHER
ON EXPIDITED BILL 15-16: RECORDATION
TAX-
RATES ALLOCATIONS - AMENDMENTS
BEFORE THE MONTGOMERY COUNTY COUNCIL
MAY 10,2016
Good afternoon. I am Jane Fairweather, a member of the Executive Board of The Greater Bethesda Chamber
of Commerce, and I am here to testify on behalf of our 600 plus member organizations in opposition to
Expedited Bill 15-16.
The piece of legislation you have before you would increase recordation tax rates in certain instances by 22%
to 48%. While we applaud the Council's interest in maintaining quality schools in Montgomery County,
with this increased recordation tax we are chasing away the very families who would benefit from living here
and attending these schools.
. There is no dispute that the County is in need of affordable housing, a strongly held belief and goal that
all of us in the housing industry support. However, out there in the real world, as elected officials, you
must understand that even for those people who are trying to purchase market rate units, the current
costs are almost untenable and becoming even more so, particularly for first time home buyers. A report
released last week by Trulia indicated that Silver Spring tops the list when
it
comes
to
metro areas
nationwide where low-income residents have been priced out of the market. When you add the fact that
Maryland has the highest closing costs in the region, you harm the least capable that you claim to care about
the most.
15 years ago, the State of Maryland recognized the burden high costs placed on first time buyers and passed
the First Time Maryland Home Buyers Act. This legislation allows first time buyers in Maryland
to
get a
significant discount on their transfer taxes in an effort to encourage more home buyers to settle here. Even
with this discount, we still have the highest closing costs in the region.
Many borrowers already have difficulty accumulating the cash needed to enter the housing market the first
time. Of note as well, is the fact that in Northern Virginia and DC, real estate taxes are paid in arrears, while
in Maryland they are paid in advance, thereby requiring a buyer in Maryland to be responsible for 9-10
months of taxes delivered in cash at settlement. By increasing recordation taxes, you will greatly harm first
time and mid-level buyers who are already disadvantaged by the loss of entry level homes and escalating
prices. The proposed companion increase in the property tax rate this year will deal an even stronger blow at
closing, given that buyers are not eligible for the homestead exemption in that first year.
It
will also have an
impact on sellers since the typical transaction splits transfer and recordation costs
50150.
An
analysis by
GCAAR points out that
if
passed, recordation costs will increase approximately 22% on homes $500,000 and
below which translates into a $675 increase on a $500,000 home and 48% on every dollar over $500,000.
This means a $1275 increase on a $700,000 home, and $2000 on a $950,000 home. These are significant
amounts that will, without question, impact the recovering housing market.
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During a time when we are trying to send a message that Montgomery County is open for business and seeks
to welcome new businesses through our newly privatized economic development vehicle, we seem to be
ignoring the fact that when businesses evaluate relocation, the future housing needs of their employees is a
tangible item to consider. With higher transactional costs already associated with Montgomery County
before
the advent of this bill, why would we
be
moving in this direction, which is at cross purposes with our
economic development strategies?
The business community is witness to many such conflicting policies in the County that make it increasingly
difficult and expensive to operate a successful enterprise within our boarders. We need some help, not
additional burdensome costs.
We thank you for the opportunity to present these comments.
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Greater Capital Association of
REAL
TORS® (GCAAR)
Expedited Bill 15-16,
"Recordation Tax-Rates -Allocations-Amendments"
Position: STRONG OPPOSITION
May 10, 2016
Honorable Councilmembers, my name is Peg Mancuso,
I
am the president of Greater Capital
Area Association of REALTORS® and am testifying on their behalf. GCAAR represents
nearly 10,000 REALTORS® and real estate professionals. We are also the voice for
thousands
of buyers, sellers and homeowners. While currently serving as GCAAR's
President, I also bring over 30 years' experience in real estate in Montgomery County.
First and foremost, GCAAR maintains an absolute commitment to fostering a world class
public school system in Montgomery County. Vibrant public schools are a critical
investment in our youth and, thus, the future well-being of the entire County. We recognize
MCPS' success is a public trust and responsibility, and current construction challenges
present obstacles we
all
must
be
committed to solving.
With that understanding, GCAAR
is firm
in its belief that President Floreen's idea to
generate financing by placing a disproportionate burden on homeownership
is
neither
sound nor
fair,
and we must vehemently oppose the proposed recordation
tax
increase. This Expedited Bill not only pays for school improvements, but other government
expenditures at the expense of a targeted segment of the population: those purchasing, selling
and refinancing homes.
1
Just as education is of criticalimportance to the future of the County, the investment in
homeownership is a constant positive force in our communities. Homeowners across the
economic spectrum contribute immensely to Montgomery County's revenue stream, not just
via the taxes they pay but also local businesses they own and support.
2
Recordation taxes in the county are
ALREADY
among the highest in the countrv3, and
despite being dedicated in large part to education, this Bill would instantly increase those
taxes by an astronomical 22%, with a
48%
rise on the rate for the valuation of properties over
the first $500,000.
4
Just
to farther clarify, transfer and/or recordation taxes differ from ordinary property taxes
in
that the transfer or recordati.on
tax
is a one-time
payment made
at
the transfer of
the
land.
It is a common misconception that these taxes are
a:morttwt
into
the
mortgage or capitalized into to
the price of the property. This difference significantly affects the stability
of
tax revenue--Uansactions
actually
need
to
transpire
for a
jurisdiction to collect transfer or recordation taxes. Excessive dependence on these as a significant share of government revenue is
risky
given
the ups
and
downs of real esrate markets
and
transactions.
2
It should be noted that when properties are sold, the revenue contributions of new property owners are invaluable to Montgomery County's
economy. Residential buyers in:vest millions of dollars in retail as they make improvements
and
decorate their new homes (e.g., sales
tax
revenue
and
increase
in
property value assessment revenue).
3
The
Federal Government
and
14 States have already done
away
with recordation
and
transfer taxes altogether, with four
of
them going so
far
as to pass Con.stituti.onal amendments
against
their
creation.
4
GCAAR's calculation is on the "base" recordation rate
of
$2.20/$500 on the sale price or,
if
refinancing, on
the
additional amoUllt borrowed
over the remaining principal Currently, the "school increment" is $1.251$500. The introduced Bill would raise the rate
by
$.75 to $2.00/$500.
1
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Why are the homeowners we continually strive to usher into Montgomery County being
asked to bear such a disproportionate load?
5
All residents will benefit from public service
improvements, therefore we
all
should be invested in paying for them.
GCAAR also finds it inconceivable, nay incomprehensible, that the Council would consider
pushing through a $185 million tax increase on homeownership in less than a month's
time. Such a significant surge in tax rates would present immediate challenges to all
homeowners, but would be particularly onerous for first-time homebuyers, seniors, and any
resident who needs to access the equity in their home to pay for a challenge or change in real
life circumstances, such as college and medical emergencies. These are
people
being
affected, not just ATM machines.
6
Further,
if
the Council is looking for more revenue, there can be equitable and broad based
funding solutions. Using the narrow approach of solely raising recordation taxes to fund the
County's most valuable asset is short-sighted and unpredictable.
7
The constant need for
funding improvements to our schools deserves a more measurable revenue stream.
8
In conclusion, GCAAR is entirely committed
to
finding funding solutions for · ·
MCPS. However, we do not believe overburdening those who make long term investments
in our County is neither just nor prudent.
9
Homeownership is one of the best opportunities
for people to maintain security and build equity-not a piggy bank for the Council to use at
whim.
There must be a better way-let's find
it
together.
The "Recordation Tax Premium"
ls
$1.551$500 and applies to the amount
in
excess
of
$500,000.
The
introduced Bill would also raise
that
rate by
$.75 to $2.30/$50).
5
We understand there are many factors that detennine the jurisdictions to which residents will move, but you
have
heard innumerable times that
taxes play a significant part in that decision. ANY increase in recordation
and
transfer tax rates from this point
forward
would prove
counterproductive
by
limiting homeownership
and
reducing mobility.
6
See also comparative example
of
a $450k home
and
a $750k. It should be noted, however, that Montgomery County's average sales home price
is
currently approximately $474k, which is significantly more than all of our neighboring jurisdictions-even Howard County (see March 2016
Housing Statistics). Even
if
those otherjurisdictions doubled their recordation and transfer taxes,
they
would likely still pay less than
Montgomery County currently does;'
1
The National Association ofREALTORS® has also done an extensive study on the negative effects of recordation
and
transfer taxes throughout
the nation available for your review
at
http://archive.realtor.oWsites/dt:,fault{fileslretranffenaxes.pdf. There you can. also review a more
comprehensive overview of how recordation
and
transfer taxes are narrowly based taxes resulting in "deadweight loss of taxation." Source:
National Association of REALTORS®, Potential Impacts
of
l11Crease in Real Estate Transfer Taxes (August 2003.)
8
It is also important to note that based on the most recent housing statistics (see attached), Montgomery County's average home sales price
has
actually decreased
by
over $25k. This is signi.ficant, considering that recordation
and
transfer taxes are dependent on the sales price ofa home.
9
From a pollcy perspective, recordation
and
transfer taxes are characteristically discriminatory because
they
single out one particular type of
asset
and
activity- the purchase of real estate. How is it fair to punitively tax real estate transactions out of the millions of other transactions
that take place in Montgomery County every year? Recordation and tra!tsfer taxes blatantly discriminate against buying a home versus buying
some other type ofasset such as stocks, bonds, or other uwnership interest purchases. Why are we choosing to discriminate those who want to
invest their families in Montgomery County?
From the real estate market perspective,
if
people cannot move up from starter homes, it actually has negative effects on overall affordable
housing perspectives because there will be less affordable housing stock available. Those who have the ability to move from their older
properties
may
also be hesitating because of
all
the costs associated-stifling the improvement of these properties.
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Housmg
St
a
f
IS
f
ICS:
M
arc
h
2016
Units
Average Price
Median Price
Pending Units
Active Inventory
Months
of
lnve ntory'"
2016
2015
37
556
641
688
93
34
158
74
172
38
276
26
219
270
21
836
705
52
24
91
45
131
84
146
%Chg
-13.5%
22.1%
-0.2%
10.0%
21.5%
-41.2%
17.1%
5.4%
18.6%
-13.2%
7.6%
19.2%
25.1%
4.1%
-33.3%
0.6%
2.0%
-11.5%
-20.8%
12.1%
4.4%
6.1%
7.1%
-10.3%
2016
$76,720
$341,773
$148,063
$248,847
$315,234
$143,641
$324,636
$213,869
$270,034
$112,551
$292,458
$251,966
$235,286
$425,222
$150,056
$473,902
. $240,076
$409,604
$140,847
$281,435
$357,817
$167,606
$140,321
$253,766
2015
$69,787
$355,516
$146,683
$251,879
$298,730
$155,268
$269,370
$188,833
$254,244
$158,371
$284,984
$330,370
$254,800
$391,038
$259,248
$499,348
$234,460
$249,843
$95,117
$252,750
$310,271
$166,720
$149,898
$237,228
%Chg
2016
2015
$56,000
$299,450
$87,500
$208,350
$273,000
$155,700
$259,250
$180,000
$249,692
$137,500
$260,500
$305,000
$230,000
$365,162
$180,000
$397,450
$224,900
$235,000
$65,200
$230,000
$270,200
$149,900
$151,950
$210,500
%Chg
7.1%
0.2%
22.8%
1.8%
4.4%
-22.9%
12.8%
13.3%
4.1%
-39.7%
-0.2%
-37.7%
-2.6%
2.1%
-33.3%
-3.1%
4.4%
24.5%
16.6%
13.6%
-0.1%
-6.3%
-6.5%
6.8%
2016
57
1047
996
1275
207
51
310
150
295
34
481
55
411
514
48
1453
1312
95
25
175
66
235
122
219
2015
70
866
946
1051
158
46
242
118
275
36
405
28
331
425
28
1310
1119
86
23
145
48
187
105
192
2016
463
2508
3144
2650
614
235
759
660
818
316
1140
415
1175
992
322
2519
1699
511
205
684
482
745
555
1536
2015
525
2736
3028
2659
697
278
827
721
777
336
1034
444
1252
1010
338
2504
1638
633
218
711
514
833
578
1748
__
201 6
14. 5
3. 7
4. 9
3. 5
5. 4
11. 8
4.1
8. 5
4.
0
9.
6
3.
8
13. 4
4.
3
3. 5
23. 0
3. 0
2. 4
11.
1
2015
14.2
4.9
4.7
3.9
7.5
8.2
5.2
9.7
4.5
8.8
3.7
17.1
5.7
3.7
16.1
3.0
2.3
12.2
9.1
7.8
11.4
6.4
6.9
12.0
Allegany
Anne Arundel
Baltimore City
Baltimore County
Calvert
Caroline
Carroll
Cecil
Charles
Dorchester
Frederick
Garrett
Harford
Howard
Kent
Mo~tgomery
32
679
640
757
113
20
185
78
204
33
297
31
274
281
14
841
719
46
19
102
47
139
90
131
9.9%
$59,950
-3.9%. $300,000
0.9%
-1.2%
5.5%
-7.5%
20.5%
13.3%
6.2%
-28.9%
2.6%
-23.7%
-7.7%
8.7%
-42.1%
-5.1%
2.4%
63.9%
48.1%
11.3%
15.3%
0.5%
-6.4%
7.0%
$107,450
$212,000
$285,000
$120,000
$292,500
$204,000
$260,000
$82,854
$260,000
$190,000
$224,000
$373,000
$120,000
$385,000
$234,900
$292,500
$76,000
$261,250
$270,000
$140,500
$142,000
$224,900
Prince George's
Queen Anne's
Somerset
St. Mary's
Talbot
Washington
Wicomico
Worcester
10. 8
6.
7
10. 3
5. 4
6.
2
11. 7
. 5,772 5,417
MARYLAND
6.6%
$291,025 $288,911
0.7% $252,068 $246,361
2.3% 9,633
8,240
25,147 26,039
4.
4
---------·
Reported by MRIS and Coastal Assoc1at1on of Realtors. NOTE: UNITS ARE THE "UNITS" SOLD, PENDING ARE UNDER CONTRACT
"'Months of inventory based on current active inventory and monthly sales for the corresponding month; Data are revised on a regular basis. Readers of these reports
should note that older reports have not been adjusted to reflect these revised data. This report, however, contains the latest reliable data to date.
4.8
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May 9, 2016
Montgomery County Board of Education
Carver Educational Services Center
850 Hungerford Drive, Room 123
Rockville, MD 20850
Montgomery County Council of PTAs
Upcounty Regional Services Center
12900 Middlebrook Road,
3rd
Floor
Germantown, MD 20984
Re.
Invitation to Work Together on Stable and Equitable Funding Solutions for MCPS
Honorable Members of the Montgomery County School Board !ind Council of PTAs:
I am reaching out to you on behalf of the Greater Capital Area Association of REALTORS® (GCAAR).
Our Association, along with our 10,000 members, extends our solid commitment to ensuring
Montgomery County Public Schools remain amongst the best in the nation. We know MCPS is facing
serious challenges in financing vital capital improvements. In an effort to find secure and adequate
funding solutions, we would like to work together.
GCAAR values investments in education. Our public schools embody an exemplary system where
students of all backgrounds are able to attain a world-class education without concern over cost. For the
homebuyers and renters we serve (specifically those with or planning to have children), it is often why
they choose to build their lives in Montgomery County. Overall, a vibrant school system fosters
communities, feeds local businesses and benefits the entire County. Our schools' success is a public
responsibility and current construction challenges present obstacles we all must be committed to solving.
It is unacceptable an institution as critical as MCPS is unable to operate at its full potential.
However, we do not believe Council President Floreen's idea to generate monies solely taxing
homebuyers alone is a fair nor stable way to fund our school construction needs. Just as education is of
critical importance, homeownership also positively impacts the quality of life in our community. To
illustrate, the County has over 1,000,000 residents and tens of thousands of businesses and employees.
The proposed tax would put the burden of generating new school construction money ONLY on those
buying, selling, or refinancing a home. Why are we asking the few, who are already taking on a life-
changing event (buying or selling a home, refinancing their home for education, health or other family
reasons) to pay for the entire community's school needs? Aren't we all in this together?
Further, economic circumstances change from year to year, and sales prices can fluctuate.
It
is difficult
for both County analysts and real estate professionals to accurately predict revenue from home sales.
Using a narrow approach such as recordation taxes to fund the County's most valuable asset is short-
sighted, uncertain and imbalanced: let's find a more equitable, across the board and balanced approach.
While it is unfortunate GCAAR was not involved in any of the funding conversations to date, it is not too
late. We respectfully ask for a thoughtful discussion on developing a more equitable, across the board,
predictable plan to support our schools. We are confident our shared commitment to our youth and
schools will lead to better solutions. We look forward to setting up a meeting as soon as possible.
Sincerely,
Peg Mancuso, 2016 GCAAR President Contact: ekrauze@gcaar.com
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Before the Montgomery County Council
Expedited Bill 15-16 - Recordation Tax - Rates -Allocations - Amendments
SUPPORT
March 6, 2016
Dear Councilmembers,
It is with great respect for the work that you do in balancing the needs of our wonderful
county, that I write this testimony to ask for your help for our schools. I applaud Council
President, Nancy Floreen, for introducing this bill to increase the Recordation Tax. It is
essential that the council fully fund the Board of Education's request for Capital
Improvements in our schools and the Recordation Tax is a step in that direction.
For those who say that the Recordation Tax increase will lead to a decline in home
sales, I ask them to consider whether home sales would also be impacted by a decline
in the school system which is the inevitable result of not fully funding MCPS. Parents in
MCPS schools have been outspoken this year because we are not okay with the
decline in our school system. We have seen that year after year, the County Council
and Board of Education have not been able to increase funding for our schools in large
part because of revenue shortages in our county.
One of the· projects in the BO E's CIP request is an addition which would partially relieve
the capacity problem at my son's school, Rolling Terrace Elementary.
The needs at Rolling Terrace are much more dire than the MCPS numbers suggest.
Rolling Terrace currently has about
900
students.
Our building has classroom space
for 747 students and so MCPS calculates our building as about 153 students over-
capacity. But our school is actually more than 250 students over the school's core
capacity.
Core spaces are the shared spaces in the school: the cafeteria, the gym, the field and
playground space, media center, bathrooms and pull-out spaces. Although MCPS
calculates Rolling Terrace as being able to fit 74 7 students into claSSfoom spaces, they
have only provided us with enough
core space for
640
students (this is our "core
capacity" number). So, we are actually looking at a number of more than 250
over core capacity.
Why does this matter? Because elementary school students at Rolling Terrace begin
eating lunch at 10:15 when they finished eating school breakfast at 9. Every day,
students waste valuable learning time waiting in bathroom lines. Administrators spend
more time solving space and scheduling issues and less time working with teachers to
@
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improve their teaching. If it's been raining, parents walk through inches of mud to pick
up their kids at the end of the school day because there is no more grass on the field.
We even have ESOL students who are receiving pull-out services in what used to be a
closet.
If the Board of Education CIP request is fully funded, Rolling Terrace will receive some
relief for this overcapacity in 2020. However, the proposed tax increases still fall short of
fully funding the Board of Education's CIP requests. On April
14th,
you received a "Non-
Recommended Capacity Project Delays" list from MCPS (see attachment) and the
Rolling Terrace relief project is on this list. Because of this document, Deputy Council
Administrator Glenn Orlin proposed a two-year delay of the project that would relieve
Rolling Terrace (reconciliation memo dated April 22).
The conditions at Rolling
Terrace cannot wait another two years. We need the money for the CIP projects
now. Please fully fund the BOE requests through the Recordation Tax, the
Property Tax, or whatever else it will take. Our students are the future of this
county and they are in need of your full support.
Sincerely,
~<;u'¥f
Lisa Seigel
Mom to Auden (in
3rd
grade at RTES) and Juno (incoming Kindergartner at RTES)
Rolling Terrace PTA President
Attached:
Impact of Non-recommended Capacity Project Delays
(MCPS, April
14,
2016)
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Impact of Non ..recommended Capacity Project Delays
April 14, 2016
1g
Sh lwlh
su
b
stan
ti
a
I
space
d
e
fl
c
Its
are
h" hll
1g1
ted I
n
b
0
Id
coos t
Type of ProJec:t and Length of
Non-recommended Delay
BvSchool
~Etw
CagacJtx.Projects_
Delayed by
two~
••w--
Board of Education CIP
Requested Completion Date
Non-recommended
Completion Date
Space Deficit at
School In Year Prior
to BOE Requested
Completion Date
Spac:e Deficit at
School in Year Prior
to
Non-recommended
Completion Date
--
----------.----·---~ --~------------
--~
....
··-·---·----~---------
--
·178 seats
at
Cedar Grove ES
-240 seats
at
Clarksbura ES
-322 seats
at
Wilson Wims ES
New School:
Clarksburg Cluster ES
(Relieves Cedar Grove,
Clarksbura and Wims elems_)
Additions:
Mon_tgomery Knolls ES
&
Pine Crest ES
(Additions relieve
Forest Knolls
ES
and
August2019
---
August 2021
seats at Cedar Grove ES
·106 seats at Clarksbura ES
-327 seats
at
Wilson Wims ES
-2~2
~--
Auaust2020
Auaust2020
August2022
Auaust2022
-115
seats
at Pine Crest ES
·221 seats at Forest Knolls
es
• 100 seats at Pine Crest ES
·176 seats at Forest Knolls
es
---·--------- Pine_Crest
ESJ
Pinev
Branch
ES
- - - --Walt wtiitman HS
----·--------~~··-·--··-
-------~-----------·-·---·-· -~·-----·-
---··
···-----·-·
-----~~~-
--·
-----------~-·---~---------
Auaust 20?1
August2020
Aug~023
-121 seats
·311 seats
- 129 seats
in
sixth year
·340 seats
---
----------
August2022
Caoacitv
Prolects
Delayed
by one
r_ear
Additions:__
Thomas W. Pyle MS
Col.
August2020
·-
------
·-
August2021
• 311 seats
.293 seats
·262 seats
·330seats
e.
Brooke Lee MS
--------
--1'ugust 2020
-------
·------
AUQUst2021
----
~-~
-
-186 seats
-282 seats
--Takoma Park MS
-·---~ust202Q
------~ust
2021
If'_
.,
--
fr>P
Lt
I
,
'"--~"-~·--
f£..
-
Caeacl!Y: Prof
ects
All expenditures
removed from CIP
Additions:
WQ\L:;
\J
.
'
l't'WJC.
\
n
l"'>O"""ll~
-')
V"
,. __ ,,.,.,. , .,,,,,.
re
.,..._
-
/
,,.,,.
"
-
>ift,
".:>
{)I.Jc;?
/V
/"Ann c.i-k... ; ..,
,I..,,,,
{..1·,,,,
,..1,,,
I
~
-
f-1
;::..::;,
-Z.i::.v
StVl'l
1
'1A
l
.
-
';';.)
c::ri
-
a
-
East
Silver Sorino ES
(Addition
re~
_
Rollino Terrace ES
Auoust2020
W
J
-
CIP
a
-
·149 seats
-
at Rolling Terrace ES
Removed from
vy•.......-
--
S""fiA~-
PIA_l\
,..,__ ,.. ; • J...
---.,,,,f..JIJ-.......-.-
z
ve
~
':5
T_.
- 128 seats in sixth year
~
~
..........
4
Greencastle ES
August 2020
~..!J_9ust
2020
Removed from CIP
-132 seats
----
-134 seats
-127 seats
--------------
=
___________
Woodlin
·----
-
ES
----
-
,._
fromCIP
-130 seats
0---
-----
-
ects
- - ·
r delay
for
elementary-schools
and high schools
Cold Spring ES
DuFief ES
{relieves Carson ES]
Belmont ES
Stonegate ES
Damascus ES
Twinbrook ES
Summit Hall ES
Rosemarv Hills ES
Wootton HS
POolesville HS
Au!'.!ust2021
Auaust2021
AUQUSt2022
Auaust2022
no space deficit
• 331 seats at Carson ES
no snace deficit
-323 seats at Carson ES
August2022
August20~
----~g_IJl;t2022
---
Januarv 2023
January 2023
Januarv 2023
Januarv 2023
AuQust2022
"AU!lUSt 2024
January 2024
January 2024
JanuaE.024
January 2024
AUQUst 2023
Auaust2025
August2021
_
_l!Q_~ df'.!!2!!~.
-48 seats
·9 seats in sixth year :
-1 seat in sixth -year
·191
~~in sixtll~
___
no space deficit
•70 seats in
sixth~
•25 seats in sixth year
no s2ace deficit
-45 seats
-9 seats in sixth year
-1 seat in sixth vear
-191 seats in sixth year
no SJ:!ace deficit
---·
- 7'o
seats in sixth vear
-25 seats in sixth year
Note: Enrollment projections in lhe CIP extend six years,
to
the 2021-2022. In cases where a capacity project Is delayed beyond the six years, the space
available or deficit In the sixth year of the
Pro.I
·ection is shown.
~
V?::"',
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~1
TESTIMONY IN OPPOSITION
Bill 15-16, "Recordation Tax -Rates -Allocations-Amendments"
Tuesday, May 10, 2016
Susann Haskins
Council President Floreen and members of the Montgomery County Council, thank
you for the opportunity to present before you today. My name is Susann Haskins
and I am a concerned Montgomery County resident. I have lived here since 1985
and worked in real estate for the last 30 years. Prior to that, I taught children with
learning disabilities. I have a Master'sdegree in Special Education and a deep
commitment to public education. In fact, three of my children attended
Montgomery County Public Schools.
Based on my experience managing a large residential real estate office in the
County, I caution you against haphazardly increasing real estate recordation taxes.
We cannot afford to add any more barriers to homeownership.
When working to put together a down payment on a home, even a few thousand
.dollars in added costs can h;ive a major impact.
For example, if you were to buy a $450,000 home
1
and put 5% down with a 95%
mortgage, your charges at settlement--closing costs plus down payment-would
be just under $40,000
2 •
$40,000 is a lot to have in cash!
Plea5e see GCAAR average home prices for 201512016, as well as recent MRIS listings in Montgomery County.
It
is important to note, that for
the same purchase price, one could see a marked difference in the home they would be purchasing in Howard County, which currently ranks even
higher in schools than Montgomery County, with lower tax rates.
1
The 95/5% down loan has a slightly higher interest rate to offset private mortgage insurance for buyers with excellent credit Less than
excellent credit would likely pay the private mortgage insurance in addition monthly.
If
the loan is FHA, the buyer can put down only 3.5% and
finance 96.5%, but there will be a monthly mortgage insurance premium for the life of the loan.
1
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Now, it is deeply troubling to know that our public servants would consider
imposing yet another tax barrier to homeownership with hardly any focus on its
long-term effects. I wholly agree with GCAAR that we need a thoughtful
discussion on developing a
predictable and equitable
plan to support our youth.
It
would be beyond unconscionable to push this measure through without
considering all of the negative ramifications, as well as possible alternatives.
There has to be a better way.
Thank you.
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Housmg Stat1stics: March
2016
..
Units
2016
Allegany
Anne Arundel
Baltimore City
Baltimore County
Calvert
Caroline
Carroll
Cecil
Charles
Dorchester
Frederick
Garrett
Harford
Howard
Kent
Montgomery
Prince George's
Queen Anne's
Somerset
St. Mary's
Talbot
Washington
Wicomico
Worcester
...
MARYLAND
-
Average Price
Median Price
2015
$69,787
$355,516
$146,683
$251,879
$298,730
$155,268
$269,370
$188,833
$254,244
$158,371
$284,984
$330,370
$254,800
$391,038
$259,248
$499,348
$234,460
$249,843
$95,117
$252,750
$310,271
$166,720
$149,898
$237,228
$288,911
%Chg
9.9%
-3.9%
0.9%
-1.2%
5.5%
-7.5%
20.5%
13.3%
6.2%
-28.9%
2.6%
-23.7%
-7.7%
8.7%
-42.1%
-5.1%
2.4%
63.9%
48.1%
11.3%
15.3%
0.5%
-6.4%
7.0%
2016
$59,950
$300,000
$107,450
$212,000
$285,000
$120,000
$292,500
$204,000
$260,000
.$82,854
$260,000
$190,000
$224,000
$373,000
$120,000
$38.5,000
$234,900
$292,500
$76,000
$261,250
$270,000
$140,500
$142,000
$224,900
Pending Units
%Chg
7.1%
0.2%
22.8%
1.8%
4.4%
-22.9%
12.8%
13.3%
4.1%
-39.7%
-0.2%
-37.7%
-2.6%
2.1%
-33.3%
-3.1%
4.4%
24.5%
16.6%
'13.6%
-0.1%
-6.3%
-6.5%
6.8%
2016
57
1047
996
1275
207
51
310
150
295
34
481
55
411
514
48
1453
1312
95
25
175
66
235
122
219
2015
70
866
946
1051
158
46
242
118
275
36
405
28
331
425
28
1310
1119
86
23
145
48
187
105
192
Active Inventory
2016
463
2508
3144
2650
614
235
759
660
818
316
1140
415
1175
992
322
2519
1699
511
205
684
482
745
555
1536
2015
525
2736
3028
2659
697
278
827
721
777
336
1034
444
1252
1010
338
2504
1638
633
218
. 711
514
833
578
1748
Months of
Inventory*
2016
14.5
3.7
4.9
3.5
5.4
11.8
4.1
8.5
4.0
9.6
3.8
13.4
4.3
3.5
23.0
3.0
2.4
11.1
10.8
6.7
10.3
5.4
6.2
11.7
2015
14.2
4.9
4.7
3.9
7.5
8.2
5.2
9.7
4.5
8.8
3.7
17.1
5.7
3.7
16.1
3.0
2.3
12.2
9.1
7.8
11.4
6.4
6.9
12.0
4.8
2016
$76,720
$341,773
$148,063
$248,847
$315,234
$143,641
$324,636
$213,869
$270,034
$112,551
$292,458
$251,966
$235,286
$425,222
$150,056
$473,902
$240,076
$409,604
$140,847
$281,435
$357,817
$167,606
$140,321
$253,766
$291,025
2015
37
556
641
688
93
34
158
74
172
38
276
26
219
270
21
836
705
52
24
91
45
131
84
146
5,417
%Chg
-13.5%
22.1%
-0.2%
10.0%
21.5%
-41.2%
17.1%
5.4%
18.6%
-13.2%
7.6%
19.2%
25.1%
4.1%
-33.3%
0.6%
2.0%
-11.5%
-20.8%
12.1%
4.4%
6.1%
7.1%
-10.3%
6.6%
~
$56,000
$299,450
$87,500
$208,350
$273,000
$155,700
$259,250
$180,000
$249,692
$137,500
$260,500
$305,000
$230,000
$365,162
$180,000
$397,450
$224,900
$235,000
$65,200
$230,000
$270,200
$149,900
$151,950
$210,500
32
679
640
757
113
20
185
78
204
33
297
31
274
281
14
841
719
46
19
102
47
139
90
131
5,772
0.1%
$252,068 $246,361
2.3% 9,633
8,240
25,147 26,039
4.4
Reported by MRIS and Coastal Assoc1at1on of Realtors. NOTE: UNiTS ARE THE "UNITS" SOLD, PENDING ARE UNDER CONTRACT
*Months of inventory based on current active inventory and monthly sales for the corresponding month; Data are revised on a regular basis. Readers of these reports
should note that older reports have not been adjusted to reflect these revised data. This report, however, contains the latest reliable data to date.
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Page3of4
09-May-2016 .
4:49pm
Status: ACTIVE
List
Price: $500,000
Ownershio:
Fee Simole - Sale
BR/FBIHB:
3l2JO
Lot
ACISF: 3.00/130,580.0o
Lvls/Fpls:
2 / 1
TotFin
SF:O
Tax
Living
A~a:
1,200
Year
Built 1979
TOT EST
CHRGS:
$5,740
Tax:Yr:2016
Ground
Rent
Style: Cape
Cod
Type:
Detached
Transaction
Type:
Standard
Legal Sub:
pt
Rockville
Out
Res. 3
Adv. Sub:
Pt
Rockville Out Res. 3
Model:
Total
Maio
Auction: No
· HOAFee:/
CIC
Fee:/
Other Fee:
I
Condo/Coop
Proj Name:
I
wr1
Lwr2
AOC
Map: 1
UDd
1.fua
1
1
Schools·
BR:
FB:
HB:
ES: SEQUOYAH
1
MS:REDLAND
0
HS: COL ZADOK MAGRUDER
0
"School
information
is
provided
by
independent
third
party
sources
and
should
not
be
reffed
upon
wi1hout verification.
Upper 1
Main
Main
3
2
0
2
Bedroom-Master:
Breakfast Room:
Living Room:
Exterior:
· Bedroom.second:
Encl Glass Prch:
Workshop:
Main
Main
Main
Bedroom-Third:·
Dining
Room:
Main
Main
Exposure: Trees
Roofing: Shingle -
Architeclu~I
Gar/Crpt/Assgd Spaces: 4//
Heating Fuel: Electric
Hot
Water:
Electric
Cooling Fuel: Electric
Sewer/Septic: Septic
Soil Type:
Appliances: Disposal, Dishwasher, Dryer, Microwave, Refrigerator, Stove, Washer, Water Heater
Amenities:
Attic - Partially Finished, Automatic Garage Door Opener, Bedroom - Entry level, Closet- Master
Bedroom
Walk-in,
Closet(s) Walk-in, Drapery Rods, Drapes
I
CUrtains, Fireplace Equipment, Shades
I
Blinds, Wall to Wall
Carpeting,
Washer
I
Dryer
Hookup
·
Exterior Const: Siding -Aluminum
I
Steel
other Structures:
LotDesc:
Basement Yes, Crawl Space
Parking:
Garage
Heating System: Baseboard,
Wood
BuminQ
Stove
Water:
Public
Cooling System:
Ceiling
Fan(s).
Window Unit(s)
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MC9
5
22996
~,4!!!!;---·
---r;;;p;~..:;:=::p
Residential Synopsis -
Customer
Real
Estzte
in
Rea!Trne""
21101 WHITES FERRY RD, POOLESV1LLE, MD 20837-9444
Status:
ACTIVE
List Price: .$499,900
OWnershio: Fee
Simole - Sale
BR/FBIHB:
313/0
Page 1 of4
09-May-2016
4:49pm
LotACISF:
0.48121,026.00
Lvls/Fpls: 2 / 1
Tot