Time to end beverage container tax

May 11, 1995

The Baltimore City Council is expected to give final approval Monday to legislation that would in two years phase out the city's bottle and can tax. Mayor Kurt L. Schmoke should let that happen.

As an incentive to home ownership in the city, Mr. Schmoke has decreased Baltimore's property tax by a nickel per $100 of assessed value three times since 1989. His Strategic Financial Plan calls for four more nickel decreases from 1997 through the year 2000. But if the mayor's interest is in rewarding people who make Baltimore their home, he should agree to lift this tax that penalizes people who live and shop in the city.

Currently, when you buy any beverage other than juice or milk in the city you pay an extra tax of 2 cents on any bottle or can 16 ounces or smaller and 4 cents on any larger container.

The council legislation would, effective Jan. 1, 1996, impose a 1-cent tax on containers smaller than 23 ounces and 4 cents on larger ones. The tax would become 1 cent on all containers on July 1, 1996, and the tax would be completely removed after June 30, 1997.

Declining beverage sales in the city have steadily reduced revenues from the tax from $7.2 million in 1991 to about $6 million last year. Losing all of that revenue would equal the impact of one of Mr. Schmoke's nickel decreases in the property tax.

The beverage container tax made sense as an effort in regional cooperation when it was enacted jointly with a Baltimore County beverage container tax in 1990. But county officials succumbed to pressure from merchants and lifted their tax the very next year. That created a situation in which city consumers who had the ability to choose often shopped for beverages across the county line.

Both the Pepsi-Cola and Coca-Cola bottling companies say they can document reductions in sales within Baltimore City and corresponding increases in sales in Baltimore County since 1991. A number of factors may be responsible for that, including the population decline in the city. But the soda pop bottlers believe the city's tax played a role, too.

So do some grocery stores in the city. Operators of Santoni's in Highlandtown, for example, said Coke sales there dropped 17 percent in 1991 while sales of all other items dropped only 6 percent. That ratio was 9 percent to 4 percent in 1992 and a huge 23 percent to 7 percent in 1993.

Ending the beverage container tax might bring some shoppers back to the city, and it would reward those who never went away. Baltimore residents, among them some of Maryland's poorest citizens, shouldn't have to pay more at the store.

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