Transfer taxes see frightening downward trends

A review of the State transfer tax was included as part of the report furnished to the State’s Spending Affordability Committee on November 10.

The entire presentation is available here, on the Maryland General Assembly’s website.  The page detailing transfer taxes is on page 11 of that report.

Perhaps the most startling time series is that of funding for local Program Open Space.  FY 2008 funding for local POS is shown at $95.6 million.  Over the ensuing years, those distributions dropped to $18.6 million in FY 2009, $6.2 million in FY 2010, and are projected to hit zero for FY 2011.  Declines in the real estate market, along with the curious backwards-looking process used to settle up transfer tax distributions, lead to this decline in part — but legislation passed during the 2007 special session also substantially compromised the share of transfer tax revenues reaching Local POS projects, as the State now funds operations of the State Park system with a substantial ($21 million) segment of those funds.

Trends in local transfer taxes have mirrored this revenue dropoff, as county transfer tax underattainment has added substantial strain to recent years’ budgets.

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