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Delegate Stewart proposes split‑rate (land value) tax near rail stations to spur development
Summary
Delegate Von Stewart introduced a bill allowing counties to adopt split‑rate property taxation (heavier tax on land than buildings) within one mile of rail stations; supporters said it can spur transit‑oriented development and return value to the public, while municipalities and local governments raised revenue‑sharing and local control questions.
Delegate Von Stewart told the committee that House Bill 330 would authorize counties to adopt a split‑rate property tax — taxing land at a different (typically higher) rate than improvements — but limited to parcels within one mile of rail transit stations. Stewart framed the idea with examples from Pennsylvania (Harrisburg, Allentown) where proponents attributed neighborhood turnaround to split‑rate systems.
"What Harrisburg did is they split their property tax system into 2 parts. A tax on land and a tax on buildings," Stewart said, arguing the structure incentivizes building on vacant or underused land near transit and can boost transit ridership and local investment.
Supporters included ATU Local 689 and Greater Greater Washington, which said the measure could encourage transit‑accessible housing and help generate local revenue without penalizing development. The Maryland Association of Counties told the committee the bill offers an additional tool for local revenue and housing policy.
Municipal League and municipal representatives urged caution about a sponsor amendment that would redirect a small portion (sponsor amendment lowered an earlier 50% share to 5%) of local revenue to the Transportation Trust Fund; the Maryland Municipal League asked that local revenues remain with local governments instead of shifting to state coffers. Stewart said the 5% return to the Transportation Trust Fund acknowledges state investment in rail stations that helped raise land values.
Committee members asked technical questions about which rail systems are covered; sponsor said language in a pending sponsor amendment clarified inclusion of WMATA and MARC and the Purple Line, and that municipalities in some areas already exercise similar subclassification authority. The sponsor said the policy is voluntary for counties and noted amendments to clean up drafting and scope were forthcoming.
Why it matters: supporters said split‑rate taxation near transit can encourage infill development, increase housing near jobs and improve transit finances; opponents worried about local revenue implications and the precedent of diverting local property tax receipts to the state.
Next steps: sponsor amendment was drafted during the hearing; several local government groups asked for clarifications about revenue sharing and local control before supporting the bill in committee.
