Meal-tax proposal appears doomed Restaurant owners' opposition to 1% tariff in city may kill plan

February 02, 1996|By Gary Gately | Gary Gately,SUN STAFF

A proposed 1 percent meal tax to raise money to lure visitors to Baltimore appears dead, a casualty of considerable opposition among restaurant owners and a statewide restaurant group.

Donald P. Hutchinson, president of the influential Greater Baltimore Committee, which had proposed the tax, told restaurateurs, bar owners and hoteliers yesterday that he would urge Mayor Kurt L. Schmoke to drop the idea for lack of support.

That spells almost certain doom for the proposal: Mr. Schmoke said from the beginning he would move forward only if city restaurants demonstrated substantial support for the tax and a proposed "tourism district," comprising about 125 restaurants, where the tax would be levied. The mayor was traveling yesterday and could not be reached, a spokesman said.

For the past month, the GBC had tried to build a consensus by lobbying restaurant owners to support the tax, which would require enabling state legislation and city approval.

It said a 1 percent tax would neither hurt business nor raise customer complaints and warned that failure to increase spending for promoting the city would jeopardize its $1 billion-a-year tourism industry.

Gary Oster, chairman of the GBC's tourism committee and general manager of the Stouffer Renaissance Harborplace Hotel, was disappointed that the proposal couldn't be kept alive.

But Mr. Oster said an exhaustive consultant's study that formed the basis for the GBC's recommendation -- and the spirited debate that followed -- had forged a consensus that funding for promoting Baltimore beyond its borders must be increased dramatically and immediately.

"I think for the first time, the tourism industry -- including hotels, bars and retailers -- heard the blunt message and saw the bleak future facing our industry if we do not have proper funding," Mr. Oster said.

"The difficult part is that the solutions all require some form of sacrifice. Whether it be our industry coming up with another innovative or creative way to raise revenue or the city showing some additional good-faith effort, we must form alliances to ensure our future success."

The decision to abandon the proposal, which came at the end of a 2 1/2 -hour meeting at the GBC, leaves unanswered a question that continues to vex tourism industry leaders: How can the city avoid losing ground to much better-financed competitors?

The GBC-commissioned study warned that "woefully inadequate" promotion and marketing funding imperils Baltimore's $1 billion-a-year tourism industry and called for the restaurant tax to raise at least $2.5 million a year for the Baltimore Area Convention and Visitors Association.

Comparing convention and visitors bureaus in 10 cities, the $35,000 study found BACVA's $2.8 million budget lags well behind those of competitors. San Antonio's convention bureau, for example, spends $10.9 million a year, Philadelphia's about $6.6 million, Cleveland's, $5.7 million.

Baltimore's tourism industry, the city's second biggest, behind health care, stands at a critical crossroads, the report said.

The Convention Center is undergoing a $150 million expansion and renovation, doubling its size, and more than $400 million worth of city attractions are planned.

Baltimore, meanwhile, reduced BACVA spending $400,000 this fiscal year after a tug-of-war over spending and control between Mr. Schmoke and BACVA leaders.

Dale Garvin, acting director of the convention bureau, said he was heartened by the "total unity" on the need for more money for the nonprofit convention bureau but pessimistic about any new funding sources becoming available within the next year.

"I think we're back to square 1, with a lot more support," Mr. Garvin said. "For next year, I just don't think we're going to have a $5 million-plus budget, and that means we'll just have to continue to limp along unless the mayor steps up to the plate and gives additional funding."

Some opponents -- noting the tourism and convention trade in the city generates some $26 million in annual city tax revenues and provides 16,000 jobs -- called on the city to increase its $2 million annual contribution.

"A common sentiment is that the root of the problem is a continuing depletion of the city's commitment to BACVA," said Brendan Flanagan, a spokesman for the Restaurant Association of Maryland, representing 2,300 restaurants.

The charge has been levied repeatedly by business leaders.

Baltimore, they note, is one of only two or three major cities that provides no dedicated source of funds for its convention bureau. The GBC and the report said the city should commit to the convention bureau at least 22 percent of the money raised by the city's hotel tax.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.