The Good, The Bad, and The Ugly of Howard County's School Surcharge Fee Legislation
Hiruy Hadgu
The school facilities surcharge fee legislation was signed into law on November 6th, 2019 after it was approved unanimously by the county council. But it was not before significant chunks of the initially proposed $6.80 per square foot was chipped at by various carve-outs. After the dust settled, we are now able to determine the impact of the final version as signed by the county executive.
First of all, thank you to all who sent emails, testified (there are so many testimonies in support of an $8 fee), and paid attention. Frankly a fee as high as $6.80 would not be possible without anchoring our demand to $8 per square foot in the first place. Many will remember the initial state bill was at $4 per square foot.
There is major progress, but we can’t be complacent. Some people characterize this as a major win for the taxpayer. But, what has taken place is tantamount to a bank that accidentally or intentionally depleted a customer’s checking account to zero, having been caught, has replenished only a fraction of the account after a vicious back and forth appeal, despite the glaring evidence.
Over the next few months, it will be revealed that county’s budget has reached a new level of deficit. As the table shows, there’s no doubt that developer profit subsidies sponsored by Councilpersons Jones, Rigby, Jung, and Yungmann will do nothing to alleviate this deficit.
Here are a few highlights of the legislation.
The Good
Immediately, the surcharge fee increases to $4.75 per square foot until December 31, 2020. It then increases to $6.25 until December 31, 2021, and to $7.50 thereafter.
Suffice to say Councilwoman Liz Walsh continues to lead the way in seeing thru the garbage. She provided amendments to amendments to improve the legislation and soften the blows of the developer subsidies.
The two silver-linings are the defeat of Councilman Jones' Howard Hughes Kickback (Amendment 4) and the paring down of Councilman Yungmann's egregious exemptions in Amendment 6.
The Bad
Items 4 to 7 in the table are carveouts for affordable housing. Howard County developers have used the idea of affordable housing as a shield against proposals that hurt their profits and this legislation is a prime example.
Some will argue that affordable housing exemptions are not developer subsidies. I disagree for two reasons. First, this legislation is for schools, not affordable housing. Second, I have seen how developers can game an exemption to extract more out of it.
Creating competing objectives between money for schools and affordable housing is like choosing between food and shelter. All the cries for equity in schools seem like crocodile tears by those who advocate for such exemptions. When schools are overcrowded, when the county lacks the budget to pay teachers, when class sizes increase, the children who feel the impact most are those who live in the affordable housing. This fact is lost on the exemption advocates, because they do not believe developers should pay anything to pay for the schools. There is a fundamental disagreement about school funding between those who want infrastructure to keep up with development and those who scream for exemptions on behalf of developers at every turn.
I was encouraged that Councilwoman Jung and Rigby as the main sponsors provided a bold fee. But they immediately watered down their contributions through their “affordable housing” carveouts where, taken together these amendments can reduce the fee by $10s of millions.
The Ugly
Item 8 in the table grandfathers projects inside and outside the planned service area (PSA). The PSA defines region where public water and sewer are available. Outside the PSA comprises mainly western Howard County, while inside the PSA can be thought of as the rest of the county. Depending on the region, the legislation grandfathered projected that have reached a certain stage in the development process and freezes the fee at $1.32 per square foot.
There is no telling how many projects will be grandfathered by this carveout. As long as the fees are paid within the first two years of the bill’s enactment, the projects’ school surcharge fee does not change.
Politicians who are concerned more about staying in power or party politics and who rely mostly on special interest influence are good at doing very little to benefit the taxpayer and making it look like a big deal.
The practice is as follows: give your special interest a lot; give the taxpayer little and make it look like a lot. In life we have to compromise. But the county council seems to be compromising with us, the voters, instead of negotiating with the developers and producing strong legislation on our behalf.