Baltimore's controversial beverage-container tax moved one step closer to repeal last night when the City Council gave preliminary approval to a bill that would end the tax on May 31.
The measure received 13 votes. But six of the 19 members of the council abstained from voting on the bill, contending the council should not repeal the levy without having a sure source of revenue to replace it.
The container tax was imposed in 1989 as an additional source of revenue for a city having difficulty coming up with enough revenue to support its services.
Although council members were then somewhat reluctant to approve the tax, their decision was made easier by the fact Baltimore County also imposed an identical tax. Baltimore County repealed its tax last Dec. 31.
The tax adds 4 cents to the cost of 16-ounce beverages in glass and cans and 2 cents to the cost of smaller containers. Milk and juice products are exempt.
Budget estimates have shown that, even though the Schmoke administration budgeted only $6 million in container-tax revenues, it could bring in as much as $7 million by June 30.
To make up the revenue that would be lost if the container tax is repealed, the council is expected to give preliminary approval next Monday to legislation that would apply a $10-a-ton service charge on top of solid-waste tipping fees paid by commercial haulers at landfills and incinerators in the city.
Initial revenue estimates from the service charge are in the range of $6 million. But, during a council hearing last week, city finance officials scaled the estimate to around $4.8 million. The council and the administration are looking at various ways of amending the proposed surcharge bill to increase the revenue it would earn.
Some council members wanted to take a preliminary vote on the container-tax repeal at the same time as the vote on the tipping-fee surcharge.
Others, such as Councilwoman Sheila Dixon, D-4th, wanted to keep the container tax until June 30, the end of the current fiscal year.
Extra revenue brought in above the $6 million budgeted could go to the homeless, Dixon said. Homeless advocates marched outside City Hall during the council meeting, demanding the city spend more on the homeless.
The May 31 repeal date was offered by Councilman John A. Schaefer, D-1st, who said the city should realize its $6 million by that date. So far, the city has collected about $5.4 million from the tax.
The beverage industry and retailers have lobbied hard to get the tax repealed, saying it unfairly singles out one industry that contributes to the waste stream.
The beverage industry has been running radio and newspaper advertisements critical of the tax and identifying the council members who recently voted against repeal.
Council President Mary Pat Clarke criticized the industry's ads as being unbalanced in their presentation of the facts. After the vote, she warned the industry that, should the ad campaign continue, "It might be the cause of a vote to reconsider the repeal."
Industry representatives said the ads would cease but defended them as being informative on the issue.