$77,000,000.00

EDITOR’S NOTE: The following is a modified-for-print version of Steve McKay’s comments to the county commissioners last night at the PUBLIC HEARING “To Consider the Proposed Creation of the Oakdale – Lake Linganore Tax Increment Financing (TIF) and Community Development Authority (CDA)”

Please note the additional information linked below Steve’s commentary.


stevemckaytestifying

That is the amount of property taxes that will be diverted from the County’s General Fund to pay for the bonds under the Lake Linganore Tax Increment Financing (TIF) deal that the Board of County Commissioners (BoCC) approved on March 6. Certainly, the Meadow Road interchange will provide some general benefits to this part of the County but it clearly would not happen if Linganore was not being built out. It is also clear that the primary beneficiaries of the exchange are the Linganore residents. And you know, I really don’t begrudge the residents of Lake Linganore for wanting these things – I would too! However, for the reasons that I’m stating, I believe it should be the developer’s responsibility to finance the project – not the responsibility of every taxpayer in the County.

With $77,000,000 you could build two new elementary schools and renovate or expand a third. We certainly need the school capacity. County staff told the Board of Education that we’ll need 4 new elementary schools due to the growth in the eastern part of the County. Looking at all of the developments that the BoCC has on its calendar through the remainder of their term, I wouldn’t be surprised if we’ll really need five.

$77,000,000 equals lost property tax revenue that should be going to the General Fund to operate schools, supply essential services like fire, police, and ambulance. It would pay for road maintenance and a host of other services that the County provides to all County residents – not just those in Lake Linganore. As a result, all other things being equal, our taxes will either go up or our services will go down.

$77,000,000 is the cost for this County to help finance the developer’s required infrastructure. There is a tangible value to the County’s name and creditworthiness and the BoCC is giving it away to the developer. If this is indeed a commercially-viable project, then why is the County serving as the lender of last resort? Why isn’t the developer going to the commercial lending market on their own merits, for the capital needed to finance this project? If this was truly a commercially-viable project then it wouldn’t require this level of government subsidy. These Commissioners purport to be advocates of free market capitalism, and yet there they sit, picking winners in much the same way Washington, DC has been doing. Here is the BoCC’s shovel-ready project. We’ll all just have to hope that it isn’t the BoCC’s Solyndra.

boccTIFhearing

Every tax paying resident of Frederick County will be part of paying that $77,000,000 for the Meadow Road interchange project. But this is the real kicker because here is the ironic part. These businessmen on the BoCC that trumpet the fact that they take risks and employ others. This BoCC that derides others who don’t own their own businesses, and who have declared Frederick County “open for business.” These business-savvy guys … they’re paying $77,000,000 of my tax dollars for a $25,000,000 project!

At least I learned one important thing at this public hearing. If the developer doesn’t build enough homes to generate the property tax revenue to pay the debt on the TIF, they have a plan. The developer told us that they have planned for a Back Up Special Tax. That’s right – the developer has planned for a BUST. When we consider that the original developer – Land Steward – filed bankruptcy the day after acquiring the property in 2002, I think the current developer is just following the same blueprint, and planning for a BUST.


More information

Frederick News Post
Frederick County residents voice concerns over bonds at hearing
Friday, March 7, 2014

Frederick News Post
Letter to the Editor (by former commissioner Charles Jenkins)
Here a TIF, there a TIF
Wednesday, March 5, 2014

Frederick County government
Streaming video of the PUBLIC HEARING “To Consider the Proposed Creation of the Oakdale – Lake Linganore Tax Increment Financing (TIF) and Community Development Authority (CDA)”
Thursday, March 6, 2014

Download the following PDF documents:

Municap, Inc. Executive Summary

Municap, Inc. Memorandum

Letter of Intent

TIF Resolution

CDA Resolution

Bond Ordinance

LinganoreTIFdistrict500w