Downtown Salisbury tax incentive unfair to county taxpayers

The Ross, a 12-story, 165-foot structure that would be the tallest occupied building in Salisbury. On the east end fronting Baptist Street, a separate six-story building is planned, with a footbridge over a landscaped alleyway..
The Ross, a 12-story, 165-foot structure that would be the tallest occupied building in Salisbury. On the east end fronting Baptist Street, a separate six-story building is planned, with a footbridge over a landscaped alleyway..
Simpson Development Photo

In response to the article in this publication on Feb. 25, I feel I must clarify some things and state my position on why I do  not support the enabling legislation for the  tax abatement or tax incentive.

House Bill 1179 and Senate Bill 794 would allow this or future County Councils to give tax-free status -- of various forms -- to residential developments. No doubt giving tax abatements would spur development, as what wise builder or developer would not look at this tax plan as a gift that keeps on giving?

The proposal

  Salisbury officials brought to the Wicomico County Council’s table a proposal that they have labeled the Horizon Program. The centerpiece of this program is called The Ross project.

Apparently, this project needs a tax abatement to continue.

Meanwhile, The Ross developer is offering investment opportunities -- for investors with $50,000 or more -- a return of 15 percent or more.

If this project is lucrative enough to promise a 15 percent return on investment, one would ask: Why would it need a tax abatement?

That question is easy to answer.

Simply, it would put more money in the developers’ and investors’ pockets.

Meanwhile, the taxpayers of Wicomico County -- owners of both commercial, farm and residential properties -- will be making up the difference with their property taxes. Most would be paying even more because of recent increased assessments.

These are the people that have helped to build and support Salisbury and Wicomico County over the years.

If elected officials are that anxious to give tax breaks, let’s give them to people who have been footing the bills in the past.

Interestingly enough, one of the city officials who made the pitch for this, even stated that some of the loss could be made up by increased assessments. If this was such good idea for the county, why did four County Council members oppose a public hearing on this matter?

The support

I have talked with most of the members of the Lower Shore General Assembly delegation -- all but one have expressed that they support these bills.

Their reasoning is that the City Council supports it and four members of the County Council have shown support. And, in their defense, that’s a solid reason.

However, in the past, the county has been  criticized  for having a property tax revenue cap. And, speaking of the revenue cap, the leadership of the local Chamber of Commerce and the leadership from the Greater Salisbury Committee have both shown support for this project even though in the past they also have criticized the revenue cap.

So, are they saying it is OK to increase property tax rates on all other property owners and then give special tax break to a few?

Cost, loss and fairness

Advocates for this tax scheme say that there is “no loss” because these properties are not generating a lot of income now.

However, if built, these new buildings will not just appear and incur no other costs. These buildings will require all the other services that any other infrastructure or developments require.

These current abatements being discussed are for high-end development. We are not speaking of just a few thousand dollars a year of lost revenue, it is more of like millions of dollars for the duration of the plan.

If these bills are passed, who in the future will be standing in line for a tax abatement?  What excuses will future councils have to deny or approve these abatements?

Will there be favoritism as who will qualify?

As I stated in our County Council meeting, Wicomico County has many obligations that the city is not responsible for and does not fund: education, the Detention Center, the library system, the State’s Attorney’s Office are just a few of the obligations for which the Wicomico County budget is responsible.

I am often referred to as one of the more conservative members of the County Council and a proponent of lower taxes. So, why am I opposed to this tax give away?

Because I am also an advocate for fairness.

If these projects were as viable as they claim to be, and The Ross is going to be the moneymaker that the developer is promising investors, they should be able to stand on their own.

Why need a tax abatement or incentive as the proponents claim they need to make them work?  If Salisbury wants to give up its tax revenues, that’s completely under their umbrella to do so.  However, if Wicomico County wants to give incentives, let’s give it to all current businesses, farmers and homeowners.

And, Wicomico County can do that without legislation from Annapolis by simply keeping or lowering our tax rate.

Joe Holloway of Parsonsburg is a member of the Wicomico County Council, representing District 5.