SALISBURY – Legislation for a tax incentive program will move forward to a public hearing.
On Tuesday, the Wicomico County Council voted 4-3 to introduce legislation that would create a tax credit for new hotel and multi-family development.
Earlier this year, the Maryland General Assembly passed enabling legislation to give all municipalities in Wicomico County – and Wicomico County as a whole – the ability to establish a property tax credit for hotel and multi-family development projects. And late last month, the City of Salisbury passed its own HORIZON (Hotel and Residential Incentive Zone) program, which is expected to incentivize large-scale development projects in the downtown area through reduced property taxes.
Earlier this month, however, city officials came before the county council with a request to adopt a similar program that would spur further development in downtown Salisbury. The county’s proposed incentive program would offer multi-family and hotel developers reduced property taxes on improved lots before gradually increasing over 10 years.
“This is not a tax giveaway,” Councilman John Cannon said earlier this month. “We’re not giving away one dollar of current taxes Wicomico County currently collects. What we’re doing is trying to give relief only to the improved investment value of those properties.”
Back on the agenda this week, the council voted 4-3 to introduce the bill with one amendment. A motion to table the bill’s introduction failed, with Councilman Joe Holloway, Council President Larry Dodd and Councilwoman Nicole Acle in favor and Councilmen Bill McCain, Josh Hastings, Ernie Davis and Cannon opposed.
The county council will hold a public hearing on the legislative bill at its Aug. 17 meeting.
County leaders this week also revisited Holloway’s pitch for a countywide tax incentive program. In a work session on Tuesday, Holloway said he was seeking the council’s consensus after introducing the proposed program last month.
“I see we’re moving ahead with the Horizon project, giving tax credits to large-scale developers,” he said. “I feel if we do that, we need to also give the taxpayers of Wicomico County a break.”
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.”
Officials said the proposed program would need enabling legislation from the General Assembly.
“I see it only fair, if we’re going to give the tax abatement to developers, especially large-scale developers, we do the same thing for the citizens of Wicomico County,” Holloway said.
McCain questioned the reasons for revisiting the proposed program, as it had little support from council members at their last meeting.
Cannon argued it would be easier to change the tax rate in the next budget cycle.
“We can do this in the next budget cycle, change the tax rate in the next budget cycle,” he said. “That way, this will go into effect in like eight months instead of two years.”
Holloway, however, argued enabling legislation would ensure its success.
“That’s correct,” he replied. “But if it’s passed as a state law, we would have to do it. You are saying we can do it. ‘Can’ and ‘having to’ are two different things.”
Acle questioned if Holloway had completed any economic impact study to see how the proposed program would impact county services.
“I have had as much of an impact study done on this as we’ve had done on the Horizon project,” he replied, “and that is none.”
McCain objected to Holloway’s comment.
“That is not the case,” he argued.
After further discussion, the council failed to reach a consensus to pursue the proposed program. Dodd and Holloway were the only two supporters.