Colleagues Reject Councilman’s Tax Incentive Proposal

SALISBURY – A councilman’s pitch for a countywide tax incentive was shot down this week by fellow council members.

Following a lengthy discussion on a tax abatement program for hotel and residential developers, members of the Wicomico County Council this week entertained the idea of a legislative bill giving tax incentives to all county residents.

“It’s very simple,” Councilman Joe Holloway said. “Any tax exemptions we give to anyone we reduce the property tax rate the next budget session by the same amount.”

The proposed legislative bill – introduced by Holloway – followed a lengthy work session on Tuesday in which council members agreed to introduce a program that would offer tax credits to hotel and multifamily residential developers over the course of a 10-year term. Holloway opposed the program over concerns that it would reduce tax revenues and create unfair advantages for developers.

In his pitch this week, Holloway told council members the proposed bill would create tax credits for all county residents, not just developers.

The legislative bill reads, “to provide a prorated real property tax credit to each real property taxpayer equivalent to a prorated portion of the property tax credit granted under the manufacturer’s tax exemption, the arts and entertainment property tax credit, and hotel or multifamily residential development property tax credit.”

Councilman Bill McCain, however, said he had no interest in the proposed legislation.

“We’re the only county in the state of Maryland that has a revenue cap and no transfer tax. We’re now considered one of the poorest counties in the state of Maryland,” he said. “So we can’t just blanket say we are just going to decrease our revenues across the board.”

Holloway argued the tax incentive program being proposed for hotel and multifamily residential developers would do just that.

“We’re giving away taxes to developers now,” he said.

McCain argued the proposed tax credit for developers would lead to larger returns long term.

“It’s a very narrow, specific bill that provides an incentive that increases our revenue,” he said. “So we’re trying to increase our revenue, increase economic incentives in our county.”

McCain called Holloway’s proposal “reckless” and “irresponsible.”

“I can say the same thing about the Horizon program …,” Holloway responded.

Councilman John Cannon said he felt the proposed legislation was drafted in retaliation to the proposed tax credit program for developers.

“If you really wanted to do this, this is something you should’ve done two or three months ago when we voted on the budget because at that time was when we decided on the property tax rate,” he said. “If you seriously wanted to give a property tax rate adjustment, that’s when you should’ve done it.”

Holloway, however, argued the bill would establish a tax credit for residents in tax billings for future fiscal years.

“This guarantees it gets done if it’s passed,” he said.

After further discussion, the council agreed not to move forward with the proposed legislation.

“Another thing too is this legislative bill doesn’t talk about dates, doesn’t talk about amounts, it doesn’t even have a fiscal note saying what the ramifications might be,” Cannon said. “That’s a legislative bill.”

About The Author: Bethany Hooper

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Bethany Hooper has been with The Dispatch since 2016. She currently covers various general stories. Hooper graduated from Stephen Decatur High School in 2012 and the University of Maryland in 2016, where she completed double majors in journalism and economics.