Train tax remains in dispute

March 07, 1995|By Amy L. Miller | Amy L. Miller,Sun Staff Writer

Consensus on amusement taxes wasn't possible between owners of the EnterTRAINment line and officials from two of the municipalities the line serves yesterday, even though that was the purpose for their meeting.

And Sen. Larry E. Haines and Sen. Timothy R. Ferguson said they will not withdraw a bill they have submitted to the General Assembly that would exempt the rail line from the tax and forgive more than $300,000 in taxes accrued between Aug. 1, 1989, and Sept. 30, 1991.

A hearing date for the bill before the Senate Budget and Taxation Committee has not been set.

"If I withdraw the bill now, I'll really look bad," said Mr. Ferguson, a Republican from Taylorsville, referring to recent negative newspaper editorials on the subject. "This will create a debate, the committee will hear both sides and determine who is getting the short end of the stick."

Nevertheless, officials from Westminster and Union Bridge -- the two municipalities owed the back taxes -- continued to urge the senators to withdraw the legislation until Maryland's Tax Court decided whether the amusement charge is legal in this case.

An appeal of the assessment, filed by the EnterTRAINment line, was to have been heard by the Tax Court March 16. But at EnterTRAINment President Don Golec's request, state officials have indefinitely postponed the hearing pending General Assembly action on the bill.

"We have a judicial system set up to resolve such disputes," said Westminster Attorney John B. Walsh Jr. "The courts may decide that the railroad is right. However, this legislation appears to be an effort to shortcut the judicial process for resolution of a dispute."

As in previous discussions, Mr. Golec -- president of the company that operates the EnterTRAINment excursion trains out Westminster and Union Bridge -- continued to insist yesterday that the tax is discriminatory because his line is a passenger service, not entertainment.

Mr. Golec also said he wants a level playing field because other trains -- such as Western Maryland Scenic Railroad in Cumberland and Maryland Rail Commuter Service (MARC) trains are not charged the tax.

Amusement taxes are levied by local jurisdictions and collected by the state.

"The Western Maryland Scenic Railroad carries 30,000 passengers a year," Mr. Golec said. "They provide a lot of the services we do, but they don't serve food on the train. They carry people to the restaurant where they get fed, and take them back again."

EnterTRAINment rides often include dancing, music and dinner on adult rides, as well as storytellers and other entertainers during holiday trips for children.

State officials have ruled that the Western Maryland Scenic Railroad is different from the EnterTRAINment Line because Allegany County tax law specifically exempts the railroad from the amusement tax. In addition, it is a not-for-profit organization that receives money from Allegany County.

"You could make the EnterTRAINment Line nonprofit too," Mr. Haines told Mr. Golec when the Western Maryland railroad was mentioned yesterday. "Just take a big salary for yourself. That's how you get to be nonprofit."

State officials have ruled that the MARC commuter line is public transportation that takes people from point to point. Mr. Golec insists that is possible on his line, which usually returns from its trips to the point of departure.

"We offer the option to purchase a one-way ticket," Mr. Golec said, adding that often a one-way trip from Westminster to Union Bridge is part of a larger motor coach tour. "We intend to become a passenger railroad."

He said that if he is forced to pay the taxes, the railroad would have to close. He said banks will not lend him money with the $329,000 tax debt still unpaid.

"It's as if you couldn't go to the bank for a loan to get a new tow truck," Mr. Golec told Union Bridge Mayor Perry Jones, referring to the mayor's gas station. "We've been operating on cash flow for the past two years and we can't operate that way any longer."

The municipal officials at yesterday's meeting reiterated their desire to work out a generous payment plan with the railroad, but not forgive the debt. Although they had not budgeted for the money, each municipality does have uses for it.

For example, Mayor Jones said, Union Bridge has for two years planned to use its share of the tax to purchase property below the EnterTRAINment tracks for a park and parking lot.

"To budget for revenues we haven't gotten wouldn't be prudent," said Westminster Mayor Kenneth Yowan. "But we have items budgeted as capital improvement projects that could be funded sooner if we had the money."

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