Public Hearing Reveals Growing Divide Over Leonardtown Excise Tax Proposal

LEONARDTOWN, Md. — Concerns over taxes, housing affordability and the relationship between county government and its only incorporated town dominated a public hearing Tuesday night as residents and officials weighed in on proposed amendments to the county’s building excise tax ordinance.

The hearing, held March 10 by the St. Mary’s County Board of County Commissioners, drew developers, housing advocates, local officials and residents to discuss potential changes that could clarify how the tax applies to development, including within the Leonardtown municipal limits.

Background On The Proposed Changes

Buffy Giddens, the county attorney, opened the hearing by explaining the background of the ordinance and the limited scope of the proposed amendments.

The county’s previous impact fee expired June 30, 2022, after legislation passed in Annapolis allowed St. Mary’s County to adopt a building excise tax beginning July 1, 2023.

“That legislation said that on July 1, 2023, St. Mary’s County would have the authority to impose a building excise tax, in essence, to replace the building impact fee,” Giddens said.

She explained that the tax provides flexibility for the county to support public facilities needed as new development occurs.

The proposed amendments, she said, focus mainly on clarification.

“So these amendments are to clarify the scope of that tax, which is to reflect that it does include municipalities,” Giddens said. The proposal would also change when the tax is collected, moving it from the issuance of a building permit to the issuance of an occupancy permit.

Despite the numerous edits in the draft ordinance, Giddens stressed the proposal does not expand the tax or increase costs.

“The amendments do not raise the taxes, they do not alter the fees that were set previously,” she said. “They don’t alter the allocation funding, the allocation formulas, and they don’t really expand the scope of the policy or impose new categories of taxation.”

Conflict Of Interest Allegation Raised

The first speaker, California resident Greg Toloffson, raised concerns about a potential conflict of interest involving Mike Hewitt.

Toloffson questioned whether Hewitt’s property holdings could benefit from the proposed change and asked that the commissioner publicly disclose his financial interests.

Hewitt responded directly during the meeting, detailing his property holdings and saying none could benefit from development.

“I have 75 acres in Hollywood … in an easement with the DNR Trust. It has no development rights. It could not have any houses built on it,” Hewitt said.

He added that his remaining holdings consist of two homes in Hollywood and a property in Tall Timbers containing two apartments and a second residence.

“That’s the extent of my real estate holding,” Hewitt said.

Realtors Group Opposes Expansion

Representatives of the regional real estate industry also voiced strong opposition to applying the county excise tax within the town.

Chris Hill, past president of the Southern Maryland Association of Realtors, said the policy could raise housing costs and duplicate taxes already paid by residents.

“Expanding the county’s excise tax into Leonardtown would ultimately raise housing costs for residents and make homeownership less attainable for many families,” Hill told commissioners.

Hill said homebuyers in Leonardtown already pay roughly $24,000 in local impact fees tied to water and sewer infrastructure.

“Requiring municipal residents and businesses to also pay the full county excise tax … would create a duplicated tax burden for those buying within the municipality,” he said.

Political Criticism From Commissioner Candidate

Ryan Daniels, a candidate for the District 4 commissioner seat, criticized the board’s past handling of the tax and urged officials to negotiate more with town leaders.

“As the new excise tax was written, the town of Leonardtown was not included, what had been described as a mistake,” Daniels said.

He argued that applying the tax on top of Leonardtown’s own infrastructure fees would create a “duplicative charge without additional services.”

Daniels also directly criticized the board’s approach, saying Leonardtown should not be “punished because of ego or resentment.”

Mayor Outlines Town’s Tax Contributions

Dan Burris spoke both as mayor and as a town resident, submitting documents from the town’s attorney and outlining the taxes paid by residents.

Burris said his household tax bill illustrates the disparity between county and municipal taxes.

“We pay county tax of $5,328.74,” Burris said, noting the Leonardtown municipal tax on the same bill totaled $782.55.

He also highlighted the town’s infrastructure investments, including expanding its wastewater treatment system to serve nearby county schools.

“If we hadn’t done that, we wouldn’t have had to expand our plant again,” Burris said.

Former Commissioner Calls For Cooperation Between County And Leonardtown

Former county commissioner Thomas McKay also voiced opposition, questioning whether the county has the authority to impose the tax within the town.

“I know you really don’t have the legislative authority to do this,” McKay said during the hearing.

McKay reflected on past tensions between county government and Leonardtown leadership, recalling efforts during his time in office to improve communication between the two.

He suggested the dispute could be resolved through more direct collaboration between county commissioners and municipal leaders.

Housing Developer Warns About Impact On Seniors

Developers also raised concerns about how the tax could affect affordable housing projects.

Eric Golden, CEO of Cedar Lane Senior Living Community, said additional taxes could derail plans for senior housing development.

“Senior affordable housing is fundamentally different from market-rate development,” Golden said. “These projects operate on fixed rents and extremely tight margins.”

He warned that additional fees could make projects financially impossible.

“In many cases, that tax alone is enough to make the project financially unfeasible — meaning it never gets built,” Golden said.

Golden added that senior housing generates fewer demands on services such as schools and transportation.

Resident Calls For Broader Review

Leonardtown resident Brandon Russell urged commissioners to examine the broader history of the county’s impact fee system before making changes.

He said a 2018 study estimated the true impact of a new dwelling unit at about $23,000, far higher than the current excise tax of about $6,700.

“The current excise tax for residential development is roughly a fourth of what the estimated impact of a new dwelling unit is,” Russell said.

He also suggested the county consider protections for small businesses if the tax is applied within the town.

Comment Period Continues

After hearing from speakers, the St. Mary’s County Board of County Commissioners closed the in-person portion of the public hearing.

Written comments will continue to be accepted through March 17. Residents wishing to submit feedback may email CSMC@stmaryscountymd.gov or mail comments to the Commissioners of St. Mary’s County, P.O. Box 653, Leonardtown, Md. 20650.

Commissioners will review the public input before taking further action on the proposed amendments to the county’s building excise tax ordinance.

The proposed ordinance could ultimately determine how future development across the county, including inside its only municipality, contributes to the cost of public infrastructure.

Watch the full public hearing below:

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