Appeals court to decide tax dispute County, Annapolis fight over who should keep $9.2 million

February 29, 1996|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

The two-year dispute between Annapolis and the county over who gets to pocket $9.2 million in cigarette tax revenues will move today to the state's highest court.

The legal bickering began when the city filed suit in 1994, alleging that the county had illegally withheld its share of the tax money since 1969.

The case was dismissed in April by Anne Arundel Circuit Judge Bruce Williams, who ruled that the city waited too long to file suit.

City officials appealed the judge's decision to the Court of Appeals, saying they would not give up so easily.

"Our operating budget is about $40 million a year, so $9 million is an awful lot of money," said Alderman Carl O. Snowden, a Ward 5 Democrat. "If, in fact, we're due these dollars, it would be a tremendous windfall for taxpayers in the city."

The deputy county attorney handling the case said he is confident the appeals court will uphold Judge Williams.

"This is just the end of a long process, I think," said David A. Plymyer.

In 1945, the General Assembly passed a law that required the county to give one-seventh of all new state revenue to the city.

When the tobacco tax was instituted in 1961, the county passed a share to Annapolis. Although the County Council voted to repeal the state revenue law in 1965 after charter government was adopted, payments to Annapolis continued until 1969.

The city contends the county had no power to repeal a state law.

From 1961 to 1992, when the state stopped sharing the tax with the counties, Anne Arundel received about $34 million.

"Our position is that in the city's effort to collect state revenues held by the county in trust of the people of Annapolis, there should be no statute of limitations," said city attorney Paul G. Goetzke.

"They should be made to pay it to us now.

"The county paid us for many years," Mr. Goetzke said. "Then suddenly they stopped. We don't know why. Maybe they think they can just change state law when they want."

The claim for the back revenue was first made by Sylvanus B. Jones, a retired State Department employee and Annapolis resident. Mr. Jones filed a lawsuit in 1994, but it was dropped a short time later.

The city picked up the challenge after the county refused to share the money.

"They didn't even know they had a dispute for about 30 years," Mr. Plymyer said. "Now, they've decided that we're doing something wrong.

The issue was taken up by Sen. John A. Cade, a Severna Park Republican, who sponsored a bill in the General Assembly last year that would have retroactively repealed the county's financial obligation.

A House committee decided it didn't want to get involved in the dispute and killed the measure.

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