Sierra Club Statement on Land Value Tax

James. W. Clarke

[Before the Maryland Chapter of the Sierra Club; 23 January, 1997]

Madam Chair, members of the Ways and Means Committee, my name is James W. Clarke and I live at 1916 Dundee Road, Rockville, MD, 20850.

I am here today as a member of the Maryland Chapter of the Sierra Club's " Sprawl Cost Us All Campaign" and to express our support for this enabling legislation (HB 97)that would allow the counties and Baltimore City to establish a Land Value Tax (LVT), something the state's municipalities can already do.

We would like to start by thanking Delegate Campbell for introducing this bill and ask that the Ways and Means Committee make this bill its contribution to this year's legislative initiative or Smart Growth.

The LVT has been shown to be an effective growth management tool which is receiving increasing amounts of support. Our organization, which is one of the oldest and largest environmental groups in the country, endorses the LVT as a way to protect the environment by containing sprawl and encouraging investment in existing communities.

The LVT can be used to increase economic activity as owners of idle or under-utilized land make more efficient use of their land. Higher taxes on the land itself, not the improvements, encourage the owner to develop the land to the extent allowed by the zoning thus promoting development where it is desired, in the urban areas of the state where the infrastructure exists to support it.

University of Maryland economists Wallace E. Gates and Robert N. Schwab found that the LVT introduces job formation and growth. They found that in the 1980s the value of Pittsburgh's average annual building permits rose 70.4 percent over the previous decade. In many case applications of the LVT has led to increase in building permits and associated construction jobs.

The LVT provides a way to recapture the value added to land by the actions of government when it builds mass transit and provides sewer and water service.

The LVT would support the Smart Growth policies of economic development and directed revitalization by:

• Promoting growth and development in existing communities where there exists adequate transportation, sewer and water facilities
• Promoting infill, creative development, and the more efficient use of existing infrastructures
• Supporting compact development consistent with available infrastructure
• Encourage industrial and business develop0ment where we want it, in existing urban areas, and designated growth areas where there are available labor pools; and
• Help to maximize the use of existing transportation infrastructure, thus reducing automobile use and dependency, leading to a cleaner and healthier Chesapeake Bay and state.

Attached to my statement is an op-ed piece from the Washington Post on what the District of Columbia could learn by applying the LVT. Many of the points made in this article apply to Baltimore City.

The LVT in combination with the Governor's "State Priority Funding Areas" has the potential not only to revitalize not only Baltimore City but the state's other older urban areas. We see HB 97 as a missing piece of the Governor's Smart Growth package.

We urge the Ways & Means Committee that it adopt HB 97 as one of its legislative priorities and a contribution to legislative initiatives on Smart Growth. We look forward to working with the committee and the General Assembly to enact this important piece of legislation.

Thank you for the opportunity to present our views.