Schmoke vetoes repeal of beverage container tax Mayor's action keeps levy, worth $6.9 million, on books.

May 30, 1991|By Patrick Gilbert | Patrick Gilbert,Evening Sun Staff

As expected, Mayor Kurt L. Schmoke today vetoed legislation that would have repealed the controversial beverage container tax by midnight tomorrow.

The mayor had included $6.9 million in revenues from the tax in his proposed 1992 fiscal year budget that went to the City Council last week.

Schmoke said he had little choice but to veto the repealer bill because the council failed to come up with revenues to replace the $6.9 million that would have been lost with the end of the container tax.

After receiving the repealer bill, which passed the council by a 13-6 vote, the mayor had five regularly scheduled council meetings to take some action on the measure or it automatically would have become law. That deadline would have been up this Monday.

"The meter was running and I had to take some action," the mayor said. "I know this won't please everybody but I did what I thought was best for all of Baltimore City."

Councilman Joseph J. DiBlasi, D-6th, chairman of the budget and appropriations committee, said he doubts seriously if 15 votes can be found to override the mayor's veto.

The mayor said to have let the repeal of the container tax go through and lose $6.9 million from his proposed $2.052 billion budget would have meant layoffs and cuts in services.

At the same time he vetoed the bill, Schmoke recommended that the council consider keeping the container tax but at half its current rate, which is 4 cents for containers larger than 16 ounces and 2 cents for containers 16 ounces and smaller. Half of the container tax would generate about $3.45 million annually.

The container tax applies mainly to beer and soft drinks. Other beverage products such as milk and fruit juices are exempt from the levy.

To make up the budgeted $6.9 million, the mayor also suggested the council impose a $5 surcharge on top of the tipping fees commercial trash haulers pay at the city's landfill and incinerators and a 5 percent fee on the cost of hauling trash from commercial trash generators such as shopping centers. These two items would bring in an estimated $4.25 million in new revenue each year, according to Department of Finance figures.

Schmoke noted, too, the council has another revenue measure pending before it, one that would add a wholesale tax on certain non-recyclable products such as vehicle tires and batteries and major appliances like refrigerators and stoves.

The council has had both revenue measures for more than a month but has decided not to move on them until after it reviews the administration's 1992 budget, a process that will begin next Tuesday.

Council members are also hoping to make a 4- or 5-cent cut in the property tax rate and to come up with money to add more police officers, housing inspectors and street cleaners.

"I think that I and the council share these same goals and my administration will work closely with the council during their upcoming budget deliberations to see if we can achieve those goals," Schmoke said.

The mayor acknowledged that he might become the target of an advertising campaign from the beverage industry because of his veto.

The industry earlier this year ran newspaper and radio advertisements pinpointing some council members who had voted to support the container tax and asking that voters in the city take action against these members in this year's elections.

"Everyone was predicting when Baltimore County ended its container tax that prices of beer and soda would come down but my understanding is that didn't happen," Schmoke said.

The council initially passed the beverage container tax in June 1989 to find revenue to help it cut the city's property tax rate. The council succeeded in shaving 5 cents off the rate, which lowered it to $5.95 per each $100 of assessed value. The container tax, however, did not go into effect until December of that year and the legislation that enacted the tax carried a sunset provision ending the levy on June 30, 1990.

The sunset provision coincided with one in Baltimore County.

In June of 1990, the City Council voted to repeal the sunset provision. Under extreme pressure from the beverage industry and organized labor, the County Council, however, agreed to extend its sunset provision to Dec. 31, 1990. The county tax ended on that date.

The beverage industry then turned its attention on the City Council. Last fall, Councilman Joseph T. "Jody" Landers, III, D-3rd, introduced a bill to repeal the city's container tax on Dec. 31, 1990. That was followed by a bill from Councilman John A. Schaefer, D-1st, to end the tax on June 30, 1991.

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