Fees proposed to fill budget gap Car registration, business fees may be increased.

March 02, 1992|By Marina Sarris | Marina Sarris,Annapolis Bureau

ANNAPOLIS -- Decorative pillow manufacturers, listen up. You may have to pay $100 more to the state so the health department can inspect your wares.

Own a car? You may have to fork over an extra $8 the next time you register it. The money would help pay for the state's emergency helicopter fleet.

Pest control firms, milk processors, summer camps, manufacturers of frozen desserts and egg packers may find themselves paying new or higher fees to the state government under legislation before the General Assembly this year.

Lawmakers and Gov. William Donald Schaefer have collectively introduced more than 100 bills to impose or raise fees on businesses and citizens they say benefit from state regulation and services.

As the recession wreaks havoc with the state budget, some Maryland officials see fee increases as part of a fiscal solution, along with deep budget cuts and higher taxes.

Fiscal analysts say they don't know yet how much the bills would raise if they all passed. But the governor's bills alone would bring in about $40 million.

Lawmakers find raising fees less painful than raising taxes, even though the fee revenues would make only a dent in a 1993 budget deficit thatcould be $1.2 billion.

Fees don't provoke the political gag reflex some citizens suffer at the very mention of taxes or, as they're called in State House circles, "revenue enhancements."

Also, some legislators find the rationale for so-called user fees more palatable. They feel more comfortable arguing that businesses that require state regulations, inspections and licensing should pick up at least some of the tab. The alternative -- raising taxes on everyone -- is less fair, they say.

"Either you're going to take it in fees or take it in taxes," said House Majority Leader D. Bruce Poole, a Washington County Democrat and fiscal conservative. "The popular thing with fees is that you're making the people who use the services pay for the services."

Motorists, for example, may feel safer knowing that Maryland's Med-Evac helicopter service is there to whisk them to a hospital if they're badly hurt in an accident. Shouldn't they help pay for that service?

The Schaefer administration thinks so. It introduced a bill that would provide $26 million for the Med-Evac program by increasing vehicle registration fees by $8.

But Del. Richard Rynd, D-Balto. Co., has proposed the ultimate user fee.

Mr. Rynd wants well-to-do prisoners to help pay for the benefit of being incarcerated. He introduced a bill that would require an inmate with assets to chip in for his room and board. It costs the taxpayers about $32,000 a year to keep an inmate in prison.

But most of the fee-related bills concern the law-abiding.

The agriculture department, for example, inspects eggs for egg packers and distributors. To recoup its costs, it wants all packers and distributors with 50 or more chickens to pay a $15 fee. That could bring in $172,500 a year.

Jack Miller, spokesman for the Maryland Farm Bureau, is taking the egg bill in stride. "Fortunately, it's not a large fee. It's the sign of the times. To a degree it's a tax without calling it a tax," he said.

In general, Mr. Miller said, the consumer ends up paying for higher business fees through higher prices, but the consumer also benefits from the state's efforts to make sure food is safe.

Restaurants also would have to pay more for the benefit of having state inspections and licenses. A bill proposed by the state health department would increase the maximum restaurant permit fee from $150 to $300 in most jurisdictions.

That may not seem like much, but all the tax and fee increases imposed on, and proposed for, restaurants could put some smaller ones out of business, said Franklin Goldstein, lobbyist for the Restaurant Association of Maryland.

"If your business is up to here [in debts]," he said, putting his hand just below his nose, "and you're hit with another $100, then it takes you up to here," he continued, putting his hand above his nose. "Then you drown."

It's been 35 years since bedding and decorative pillow manufacturers have seen an increase in their regulatory fees. A health department bill would end that by raising the application fee from $50 to $150.

The state makes sure that pillows and bedding contain a tag describing their sterile stuffing.

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