Facing a battered budget and unfriendly court decisions, Baltimore County will try to preserve $1.5 million in electricity tax revenues by reaching back into the past to change its tax laws.
The County Council is prepared to vote Monday on a bill that would make its disputed method for collecting electricity taxes from five large manufacturing companies legal -- from 1985 on.
The idea is to keep the five firms from taking back $1.5 million in taxes and interest the county collected during that time under a formula that the Maryland Tax Court and the county Circuit Court already have declared illegal.
E9 The county has appealed those rulings and wants to ap
ply the change in the law before the case is argued before the Court of Special Appeals, according to Assistant County Attorney Michael McMahon, who conceived the plan.
"The [circuit] court was wrong," McMahon said yesterday. "We have to do it," he said of the retroactive bill.
The county's financial situation is far too tight to allow $1.5 million to slip away, he added. At the very least, he said, enacting the retroactive law should ensure that the county keeps the money until the full Court of Appeals decides the case -- at least a year from now.
The five companies, Genstar, Eastern Stainless Steel, Blue Circle Cement, Seagram's and A.M.G. Resources Corp., are represented in the case by the Maryland Industrial Group, an umbrella organization that handles regulatory and tax matters for 25 firms.
No one from the group appeared at yesterday's council work session, although the session had been advertised as a public hearing on the tax bill.
The council last year enacted a law that made its method of collecting the taxes legal from 1991 on.
Kevin Sniffen, general counsel for Genstar, said he was unaware of the hearing but doesn't think the county can retroactively change the law "unless they win this appeal."
Linda Stark, administrator of the Maryland Industrial Group, said she, too, was not aware of the council's public hearing.
The argument, which began in 1989, is over how the Baltimore Gas and Electric Co. assesses taxes on the firms' electricity.
The firms claim they should pay taxes on the electricity they use, as residential consumers do. But, for more than four decades, Baltimore Gas and Electric, acting as the county's agent, also has collected taxes on supplemental charges that BG&E applies to industrial accounts.
The Maryland Tax Court ruled against the county's interpretation of the law in August 1990 and the Circuit Court upheld the decision in July. No hearing has yet been scheduled before the Court of Special Appeals.