Schmoke, Clarke offer opinions on tax cuts

April 13, 1995|By Eric Siegel | Eric Siegel,Sun Staff Writer

Can Baltimore afford to cut its property or beverage container tax this year?

Mayor Kurt L. Schmoke says definitely not.

City Council President Mary Pat Clarke says she isn't sure.

The two rivals in September's Democratic mayoral primary voiced their views in separate interviews after yesterday's meeting of the Board of Estimates, where Mr. Schmoke's preliminary budget for the fiscal year beginning in July was officially unveiled.

The $2.3 billion operating and construction budget calls for 111 new police officers -- of which 96 are paid for by federal grant money -- and 50 new teachers. The new hires would be offset by 303 cuts in positions, for a net reduction in the city work force of 142.

It would keep the city's property tax rate at $5.85 per $100 of assessed value and also assumes continued collection of the beverage tax of two cents on small cans and bottles and four cents on larger ones.

The city's long-term financial plan calls for four annual cuts of a nickel in the property tax rate beginning a year from July.

But Mr. Schmoke reiterated yesterday that he does not want to cut property taxes this year because of uncertainty over the impact of proposed federal budget cuts.

The effect of the city's decision to require contractors doing business with Baltimore to pay workers a minimum "living wage" of $6.10 an hour on the budget also is uncertain, he added.

"We're just trying to make sure we can keep basic services," the mayor said. "If the council decides it wants to give up revenue, then certain services will be cut."

Mr. Schmoke also said he would like to see the beverage tax phased out beginning in July 1996.

"That would give us a year to make adjustments in our budget," he said.

To take action sooner, the mayor warned, is "asking for trouble."

Earlier this year, Mr. Schmoke agreed to a repeal of the beverage tax -- which brings in about $5 million a year in revenue but is opposed by grocers and store-owners who claim it hurts business -- if the state legislature assumed part of the costs of running Baltimore Circuit Court.

A bill to do that, however, was defeated in the General Assembly.

But Mrs. Clarke said the council is considering a modification of her earlier proposal for a three-year phase-out of the container tax beginning this July. The change calls for an initial reduction of the tax on containers from 2 cents to 1 cent but keeps the 4-cent tax on larger bottles, she said.

"We're trying to make it affordable not just for the people who own property but for the people who eat and buy sodas," she said.

The council president said, however, that she would not support the modification unless the beverage industry could demonstrate that the tax cut would increase sales enough to keep total tax collections the same.

And while she called yearly property tax cuts "essential" to rebuild the city's shrinking tax base, Mrs. Clarke said she's "not sure" the city could cut its rate this year. The "real problem" was the city's stagnant revenues, she said.

"I'm not convinced about anything right now," she said. "I haven't seen a final version of the budget."

Mrs. Clarke also downplayed any differences over taxes she might have with Mr. Schmoke -- at least for now.

"I don't want to get into 'He said, she said,' " the council president said.

Mr. Schmoke and Mrs. Clarke will get to hear from voters at the Board of Estimates' annual taxpayers' night, scheduled for April 26 at 7 p.m. at the War Memorial Building.

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