By Adam Pagnucco.
A local bill introduced by Delegate David Moon (D-20) that would end property tax breaks for country clubs would eventually generate $10 million a year for Montgomery County Government according to General Assembly analysts. That’s welcome news for the county, especially considering its current budgetary difficulties.
Under current state law, the State Department of Assessments and Taxation (SDAT) is allowed to strike agreements with country clubs having golf courses to cap the assessed value of their land. To be eligible for such agreements, the clubs must have at least 100 members who pay dues averaging $50 or more annually for each member; restrict use of their facilities primarily to members, families, and guests; have at least 50 acres of land; and have a golf course with at least 9 holes and a clubhouse. In practice, the agreements limit assessed land values to $1,000 an acre. In return for the assessed rate, a club with an SDAT agreement must agree not to sell its land for subdivision and to not discriminate on race, color, creed, sex or national origin. If a club with an agreement does sell its land for subdivision, it must pay back taxes equivalent to what it would have been paying without an agreement.
Not long ago, your author asked SDAT for all of its agreements with country clubs in Montgomery County. SDAT sent us ten of them but we later learned that there are actually fifteen of them in the county. One of them was signed in 1980 and three more were signed in 1981; all four of these are fifty year agreements. Two more were transferred from prior owners. One agreement, for the Lakewood Country Club in Rockville, was signed in 2017. In tax year 2016, when the agreement was not effective, the club’s 175 acres had an assessed land value of $1.94 million. Once the agreement takes effect, the club’s assessed land value will be $175,000 – a 91% reduction.
Moon’s local bill would abolish such agreements with country clubs in Montgomery County as of their expiration or June 30, 2029, whichever date is earlier. Because Maryland’s state constitution requires uniform rules for the assessment of land, Moon’s bill takes the form of a constitutional amendment carving out MoCo country clubs and golf courses from that requirement. The amendment would have to be approved by voters. We understand that Moon may also introduce a statewide bill to deal with SDAT agreements everywhere.
The fiscal note on Moon’s bill indicates that MoCo country clubs with SDAT agreements have a combined 3,000 acres currently assessed at $3 million. In the absence of the agreements, the fiscal note estimates that the club’s assessed land value would be $983.3 million. So once the agreements are all gone by Fiscal Year 2030, the fiscal note estimates that the state would collect an additional $1 million a year in property taxes from the clubs and the county would get an additional $10 million annually.
That’s right, folks – if the country clubs simply pay property taxes at the same rate the rest of us do, the Montgomery County Government would get an extra $10 million a year.
Delegate Moon’s country club bill is the biggest no-brainer of all time. There is no justification for the richest of the very rich to get a property tax break that no one else does. And if they are required to pay the same as everybody else, the county government would get a nice revenue bump to help it deal with our significant and increasing needs.
We hope every single MoCo Senator and Delegate will join David Moon and support his bill.