Legislation being introduced in the Maryland General Assembly will call for expanding the number of country clubs and golf courses in Montgomery County that would be assessed at the county’s property tax rates, which could lead to higher tax bills for private clubs.
Del. David Moon, a Takoma Park Democrat, plans to re-introduce legislation with co-sponsors Sen. Will Smith and delegates-elect Lorig Charkoudian, Vaughn Stewart and Julie Palakovich Carr.
Moon said the Maryland Department of Assessments and Taxation, known as SDAT, taxes private golf courses of at least 50 acres with more than 100 paying members at the rate of $1,000 an acre, instead of the value of the property as assessed by the state.
“It [the course] might be worth $100 million when it’s being assessed at $1,000 per acre,” Moon said.
Moon said the affected courses would include Bethesda Country Club, Kenwood Golf and Country Club, Chevy Chase Club, Columbia Country Club and Congressional Country Club.
Montgomery County has been losing $10 million a year since SDAT adopted the current exemptions for private clubs in 2002, Moon said. According to a fiscal analysis included in the proposed legislation, that amount could be made up by 2030 if the bill is passed in the current session.
Moon introduced a similar bill last year that would have required every private club in the county to be assessed at the market rate, but it did not advance because smaller clubs would be hurt financially by paying higher taxes.
“The problem with this one-size-fits all approach is that it lumped struggling clubs in with clubs that are not struggling at all,” Moon said.
But P.J. Hogan, a lobbyist with the Annapolis branch of Cornerstone Government Affairs who represents the Maryland Coalition of Concerned Clubs, said he opposes Moon’s bill because the exemption is meant to prevent overdevelopment in parts of the county and that higher taxes could force country clubs to close or lay off workers.
Hogan, a former state senator who represented parts of Montgomery County, pointed to the example of Indian Spring Country Club in the Layhill area, which closed in 2007 after it was sold for a housing development with more than 700 homes.
“What a lot of people fail to understand is that if a golf course sells for development, they have to pay back the difference between the market rate and the golf course rate for 10 years,” he said.
Hogan testified against Moon’s bill at a public hearing earlier this month in Rockville, and said he plans to do so again in Annapolis during the legislative session. He said he disputes the notion by some that the exemption for courses and clubs is a tax loophole.
“If you look at the definition of a loophole, it’s someone who takes advantage of an oversight. This is not an oversight, Hogan said. “You put your land into an easement [and] you don’t pay property tax on it. Ag [reserve] land is taxed at $500 per acre.”
Montgomery County’s northern crescent includes land with zoning for agriculture that is protected from development through easements.
Hogan added that SDAT’s agreement with the affected clubs runs through 2031, rendering null-and-void Moon’s argument that will help the county increase revenue.
“Even if the bill passed, the county would not see an extra dime until 2031. How is that going to solve the financial needs of the county in 2019?” he said.
This latest proposal would tax clubs at the current rate of $1,000 per acre for the first $500,000 worth of land, and the rest of the property value would be subject to the local tax rate.
“To recover this revenue, we have to get the ball in motion now to recover this revenue by 2030,” Moon said.
According to state assessment records, the property values of courses for 2017 are:
– Woodmont Country Club in Rockville – $15.5 million
– Bethesda – $6.7 million
– Kenwood – $8.8 million
– Chevy Chase – $8.3 million
– Columbia – $7.1 million
– Manor Country Club outside Rockville – $5.1 million
– Lakewood Country Club near Rockville -$7.8 million
– Argyle Country Club in Silver Spring – $4.9 million
– Members Club at Four Streams in Poolesville – $3.6 million
– Montgomery Country Club in Laytonsville – $2.2 million
– Norbeck Country Club near Rockville – $4.4 million
– Tournament Players Club at Avenel in Potomac – $5 million
– Data for Congressional Country Club and Blue Mash Golf Course in Laytonsville was not available on the SDAT website.
Dan Schere can be reached at Daniel.firstname.lastname@example.org