Gray Wants Amusement Tax Hike Repealed

April 29, 1992|By James M. Coram | James M. Coram,Staff writer

County Councilman C. Vernon Gray, D-3rd, says a 6-month-old, 50 percent increase in the county amusement tax is too harsh and should be repealed.

Gray circulated a letter among council members last week,inviting them to join him in sponsoring a resolution that would lower the tax from 7.5 percent back to 5 percent over the next two years.Only Charles C. Feaga, R-5th, accepted the invitation.

Gray's resolution would reduce the tax to 6 percent in fiscal 1993 and to 5 percent in fiscal 1994. The fiscal year begins July 1.

Even before the county began adding another 2.5 percent to the tax last October, revenue from it had been declining as a result of a slowdown in the economy, Gray said. The decline is so severe that if the tax were rolled back to 5 percent, the effect on revenue would be lessthan $300,000, Gray said.

Before the increase, which Gray called unreasonable, amusement tax revenue fell from $850,000 in 1989 to $816,181 in 1991, Gray said.

"Increasing the tax 50 percent probably was not the most prudent action to take since declining revenues may indicate that businesses are struggling," Gray said.

"The continuing imposition of the 7.5 percent rate could have an adverse effect onthe economic vitality of Howard County and most certainly on the affected businesses. Many people are already going outside the county for their entertainment because of the lower costs and greater variety available."

Gray said the tax increase has been especially hard onMerriweather Post Pavilion, which he said suffered a 9 percent decrease in attendance in 1991 compared with 1990.

Although the amusement tax increase was not responsible for Merriweather's lower attendance rates, it is expected to have an effect this year, Gray said. "A tax increase will lower attendance even further, and lower attendance means lower county revenues from the admissions tax," he said.

Theproblem at Merriweather, general manager Jean S. Parker said last month, is that many entertainers are demanding such a large percentage of gross revenue that the pavilion cannot bring them here without increasing ticket prices.

Those prices are already "in the low- to mid-20s for the pavilion, and the upper teens to $20 for general admission seating on the lawn," Parker said. The combination of high ticketprices and entertainers' demands for the largest portion of gross revenues makes it increasingly difficult for Merriweather to attract the acts it wants, Parker said.

Declining attendance figures at Merriweather were cited in a March 13 letter to Gray from 15 business leaders. They said the decline is an example of the kind of problem other entertainment and dining establishments within the county are facing.

"In 1991, Merriweather presented 54 shows . . . yet the total attendance for 1991 was lower than 1990, when only 44 shows were presented," they wrote in the letter. "For the few tax dollars that might be raised, we risk harming what has become an 'institution' in HowardCounty."

The County Council will have a public hearing on the Gray resolution May 17.

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