Counties seek new local tool to tax commercial property for transit or schools (SB 224); business groups push back
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Summary
SB 224 would let counties create a commercial/industrial subclass with a capped surcharge dedicated to transportation or education. Sponsors and county officials said the measure is optional and includes guardrails; commercial real‑estate and business groups urged an unfavorable report, citing higher costs for tenants and weak office markets.
Senators and county leaders told the Budget and Taxation Committee that Senate Bill 224 would empower counties to establish a commercial and industrial property subclass and levy an additional rate (capped at 12.5 cents per $100 of assessed value) dedicated either to transportation through a special tax district or to countywide education funding.
Senator Louis Young and Frederick County Executive Jessica Fitzwater said the enabling authority addresses growth‑related funding shortfalls in fast‑growing jurisdictions. Young stressed the bill includes protections: an explicit residential exemption, automatic credits for mixed‑use parcels, an optional small‑business credit for firms with 15 or fewer employees, notice to affected owners, application and appeal processes, and multiple layers of local approval—"enabling legislation, not a mandate," he said.
County officials and the Maryland Association of Counties supported the measure as a local option that can be tailored through public processes. Kevin Kennally said the authority would give counties a choice, not an obligation, to align costs with growth.
Opposition was extensive. Tom Ballantine (NAOP Maryland), Hugo Cantu (Apartment & Office Building Association), Laurie Graff (Maryland Building Industry Association), and others warned the surcharge would layer onto existing taxes and fees, risk pass‑throughs to tenants, depress property values, and further burden an office sector already seeing rising vacancies. The business groups asked the committee for an unfavorable report.
Committee members questioned guardrails, impacts on housing and economic development, and how counties would coordinate across jurisdictions. No final vote was taken; the committee gathered extensive stakeholder input to inform further consideration.
