Have Kamenetz and company mortgaged Baltimore County’s future?

Unfortunately, I believe the answer is Yes. The problems didn’t start with the current administration, but they certainly have accelerated under Mr. Kamenetz’s leadership. His successor, and his successor’s successor, will be left with crumbling infrastructure and revenue streams inadequate to repair or replace roads, schools, storm water management facilities, and government buildings. The day of reckoning is coming sooner rather than later, and it is going to be painful.

I chuckled, albeit ruefully, when I read the story by Pam Wood of the Baltimore Sun about the latest report from the County’s Spending Affordability Committee. Councilman Tom Quirk, who often has served as Mr. Kamenetz’s mouthpiece on the Council, seems suddenly to have found fiscal religion, grousing that Mr. Kamenetz has refused to provide a long-term plan to pay for all the county’s school construction projects and for health care for retirees, among other things.

Mr. Quirk, one of the members of the Spending Affordability Committee, wrote in the report: “The county’s financial outlook presents immense challenges that the next administration and council will be forced to address.” I am thinking that Mr. Quirk’s new-found willingness to challenge Mr. Kamenetz may have something to do with the decision by Mr. Kamenetz to fund the construction of a new high school for Dulaney Valley rather than for Lansdowne, which is in Mr. Quirk’s district.

I am sure that Mr. Quirk felt especially aggrieved by the Dulaney Valley decision, given his loyalty to Mr. Kamenetz over the past eight years. I have only one question for Mr. Quirk: What did you expect? That Mr. Kamenetz wouldn’t kick you to the curb when it served his purposes? I hope that you are a better financial adviser than you are a judge of character.

In any event, Mr. Quirk and the rest of the members of the Spending Affordability Committee are correct: There’s tough sledding ahead.

Mr. Kamenetz has robbed Peter to pay Paul, with Peter being the repair and replacement of infrastructure and financing long term obligations such as retiree health care, and Paul being development interests. The $43 million in assistance to developers intended to kick start the stalled Towson Row development is just the most recent (and most outrageous) example, but Mr. Kamenetz has been nothing if not consistent in the priority that he gives to the desires of developers over the needs of ordinary communities.

There is a reason that Mr. Kamenetz has been reticent to produce the long-term plans described by Mr. Quirk. Such plans can be uncomfortable reminders of expensive and unsolved problems. A few years back the Anne Arundel County Director of Public Works put together a long-term plan to fix that county’s neglected storm water management infrastructure. The price tag for implementing the plan was eye-popping. After the plan was released, politicians in the county expended most of their efforts on attacking the plan and its author, trying to make the bad news go away.

Mr. Kamenetz is the absolute master at reducing his exposure to criticism. He releases the minimum amount of information necessary; less if he can away with it. He doesn’t do interviews with the media on county problems or controversies – he issues self-serving statements on issues. Everything in county government is kept as close to the vest as possible, and public debate is discouraged. You think he is going to allow his departments to produce plans illustrating the unmet needs in the county, and how prohibitively expensive it will be to meet them? Not a chance.

I was glad to see that Ms. Wood mentioned impact fees in her story. The failure of Baltimore County to use impact fees or development excise taxes to fund the expansion of facilities necessary to accommodate new residential and commercial development in the county has been its single greatest fiscal mistake, and it has been an enormous one.

I’ll start with a question: Why do you think that developers lavish such enormous sums of money on Mr. Kamenetz and members of the County Council? Answer: Because development in Baltimore County is extremely profitable, in part because builders and developers do not pay for the costs of the expansion of public facilities necessary to support new development. The general taxpayers of the county do. Development in Baltimore County is subsidized by general taxpayers more than in any other comparable county in Maryland – and that does not include direct assistance such as provided to the developers of Towson Row.

The impact of no impact fees.

The last time that Baltimore County gave serious consideration to the imposition of impact fees was in 2005. It was a study by Anirban Basu and the Sage Policy Group commissioned by the Maryland Homebuilders Association (a trade group) that helped persuade Baltimore County officials that impact fees were not justified in Baltimore County. Mr. Basu concluded in 2005 that existing taxes and fees paid by the owners of new construction more than offset the costs of expanding the capacity of public facilities to accommodate the new construction.

Suffice it to say that other economists have studied jurisdictions with similar tax and fee structures and concluded that, without impact fees or development excise taxes imposed on builders and developers, the owners of existing homes and businesses subsidize the expansion of infrastructure capacity necessary to support new construction. In any case, Baltimore County remains the only metropolitan county in Maryland (and the only county in Maryland with a population of over 100,000 except Wicomico County) that does not impose either impact fees or development excise taxes on builders and developers – and it shows.

When you drive around the streets and road of the county, and visit schools and other public buildings, two words come to mind: Deferred maintenance. Infrastructure is not being repaired or replaced when it should be in Baltimore County. As it happens, I often have occasion to drive the back streets in District 4, the district represented by Council Chairman Julian Jones, one of Mr. Kamenetz’s other biggest cheerleaders on the County Council.

The condition of many of the streets in District 4 is dreadful. If Mr. Jones expected something in return for his unconditional support of Mr. Kamenetz, he sure didn’t get it in the form of improvements to the condition of the streets in his district.

The shortage of funds to do basic maintenance is directly attributable to the absence of impact fees. Money that otherwise could be used for basic maintenance of existing facilities goes toward supporting new development. Let’s look at two neighboring counties for a comparison.

The combined populations of Anne Arundel County and Howard County are just a little more than the population of Baltimore County. In the past three fiscal years, those two counties collected a combined total of about $96.5 million in impact fees.

That’s $96.5 million that the two counties did not have to spend on expanding the capacity of streets and roads and other public infrastructure to support new residential and commercial development and could use to take care of existing infrastructure. Think of what Baltimore County could have done to fix its streets, roads, schools, and other infrastructure with $96.5 million over the past three years.

For example, the developers and builders of Towson Row will not have to pay transportation impact fees. So, who is going to pay for the widening and other improvement of streets and roads in Towson necessary to cope with the traffic generated by Towson Row? That’s right, the same taxpayers paying for the $43 million bailout.

Ironically, it was Mr. Basu and his Sage Policy Group that also helped persuade the Baltimore County Council that the financial assistance package for Towson Row was a good idea. Maybe Baltimore County could ask Mr. Basu to calculate what the developers would pay in impact fees for Towson Row if it was in Anne Arundel or Howard County.

It is almost certain that if Baltimore County had enacted impact fees in 2005 it would not be facing the problems identified by the Spending Affordability Committee. It would have been better able to keep pace with the need for replacing schools, repairing roads, etc., and would not be confronting the choice of either increasing property or local income taxes, or drastically reducing spending.

Citizen apathy.

It is wrong to place all the blame on Mr. Kamenetz and his supporters on the County Council for the fact that the county has mortgaged its future. The notorious apathy of a large percentage of the citizens in Baltimore County has played a critical role. Although Mr. Kamenetz did not create that apathy, he exploited it. He certainly never told citizens that an increase in the rate of their property or local income taxes was inevitable, or that the longer the increase was delayed the greater it would have to be.

So long as their elected officials don’t raise their taxes, many Baltimore County citizens are content to ignore county government. The day is coming when those citizens are going to have to accept either an increase in taxes or a precipitous decline in their quality of life.

Because the problem has been ignored for so long and exacerbated by the policies of the past eight years, the reference by the Spending Affordability Committee to the “immense challenges” that lie ahead may be understatement. One thing is for sure, and that is that Mr. Kamenetz will not be around when it comes time to pay the piper.

David A. Plymyer

[Some of the material in this post on impact fees was drawn verbatim from prior posts on the subject.]

 

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