Bill would tax firms' purchases from gas wells Councilman DiBlasi's proposal comes as city is phasing out fuel tax.

May 07, 1991|By Patrick Gilbert | Patrick Gilbert,Evening Sun Staff

City Councilman Joseph J. DiBlasi, D-6th, has introduced legislation that would tax the purchase by manufacturing companies of natural gas from gas wells. The proposed levy could bring in an estimated $1.07 million in new revenue for the city in fiscal year 1992, which begins July 1.

DiBlasi's bill, introduced last night, would amend the city's current fuel tax for manufacturing to place a tax on companies purchasing their natural gas from the well rather than through the Baltimore Gas and Electric Co.

The proposed tax would affect 63 companies in the city, said Allen J. Reynolds, chief city auditor.

If approved, the new revenue source would be short-lived, however. The city is phasing out its fuel tax for manufacturing purposes.

The tax for the coming fiscal year will be 3 percent of the purchase price. That will be reduced to 2 percent in fiscal year 1993 and to 1 percent in fiscal year 1994. The tax will be eliminated by fiscal year 1995.

Until 1983, the purchase of natural gas had to be made through the local gas and electric utility. But federal deregulation of the natural gas industry in 1983 allowed companies the option of buying their gas directly from gas wells, said Reynolds.

He said the city was not made aware of this specific change resulting from the deregulation until this year when a special audit of the city's fuel tax provision uncovered the change.

In other action last night, the council gave final approval to a measure that would shorten from five years to one year the time a spouse must be married to a council member before becoming eligible to receive that member's pension.

The bill was introduced in February 1990 when it was discovered that Joanna Sorensen Myers, the widow of the late Councilman William J. Myers, D-6th, fell 11 months short of the five-year requirement. Myers died in January 1990 after 27 years in office.

The legislation amends the Elected Officials Retirement System and brings in it line with the Police and Fire Retirement System, which has the one-year marriage requirement.

Sixth District council members Timothy D. Murphy, DiBlasi and Edward L. Reisinger sponsored the bill, which went to the Taxation and Finance Committee chaired by Murphy. The bill received lengthy hearings and languished in committee until last week when Councilwoman Sheila Dixon, D-4th, vice chair of the panel, reported it out after being urged to do so by other council members.

Murphy told council members he did not object to the measure being reported out but that he could not vote on it because "I have lost all objectivity with regards to the bill." He declined to elaborate on his remarks.

Another bill was introduced last night that would make the same one-year eligibility rule for city employees in the Employee Retirement System to which the majority of city workers belong.

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