Hoteliers agree to 'blink-on' city tax

June 17, 1994|By JoAnna Daemmrich | JoAnna Daemmrich,Sun Staff Writer Sun staff writer Elaine Tassy contributed to this article.

Under pressure from Baltimore's tourism industry, the Schmoke administration has come up with a compromise to finance the city's share of the convention center expansion.

The city had proposed raising the hotel occupancy tax from 7 percent to 9 percent in 1996 to fulfill its commitment to pay one-third of the $150 million project, a move that drew protests from hoteliers.

Yesterday, Mayor Kurt L. Schmoke said he had worked out an agreement with business leaders to create a "blink-on" tax that would only take effect if the city fails to come up with the revenues necessary to cover the debt service on $63 million in revenue bonds.

"Tourism continues to be a major industry for the city, and we don't want to do anything to hurt it," Mr. Schmoke said at his weekly news briefing. The hotel tax increase, he added, would only "blink on" if the economic boom from new conventioneers is less than expected.

The Baltimore City Council overwhelmingly approved the "blink-on" tax last night. Council members said they doubted it would be activated with the growth in tourism.

Mayor Schmoke also announced that he's leaning toward vetoing a comprehensive revision of the city charter. This week, the City Council rejected one of the proposed changes that would have shifted two of the comptroller's main functions to the administration.

Third District Councilman Martin O'Malley led the effort to preserve the comptroller's power over municipal real estate transactions and the purchase of insurance. Mr. O'Malley called the proposed change a "blatant power grab" and said he doubted Comptroller Jacqueline F. McLean ever agreed to relinquish her control over real estate.

An 11-member commission developed the recommendation to limit the comptroller's role mainly to the oversight of audits long before any hint of wrongdoing by Mrs. McLean. The comptroller has been indicted on charges of stealing more than $25,000 in public funds and trying to arrange a $1 million city lease of the one-time headquarters of her travel agency.

In defending the proposed shift in power, Mayor Schmoke said the executive branches of almost all the surrounding counties handle real estate transactions. Administration officials also have said the comptroller agreed to the plan in exchange for increased auditing powers and control over the Equal Opportunity Compliance Office.

"I'm disappointed," Mr. Schmoke said about the council's move. "I think it was the wrong action."

Mr. Schmoke said he is likely to resubmit the charter revisions in sections when the council returns from its summer break. By fall, he said, the issue could be less sensitive with the potential resolution of the criminal case against Mrs. McLean.

Several council members signaled yesterday that they would fight hard to preserve the comptroller's powers.

"To veto this mammoth document because of one issue can only hTC confirm everyone's worst suspicions -- that his [the mayor's] efforts to acquire elements of the comptroller's office were in the name of power," charged Councilman Anthony J. Ambridge, D-2nd.

The mayor's concession on the hotel tax was embraced by business leaders, who crowded the council chambers and clogged fax machines at City Hall this month to denounce the proposed increase.

Combined with the state's 5 percent tax, the surcharge on Baltimore's 7,000 hotel rooms would have soared to 14 percent, the highest among cities in the Northeast.

Hoteliers argued it would erode the expected boom from the $151 million Baltimore Convention Center expansion and endanger tourism, the city's second-largest industry.

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