City tourist tax proposed Tariff would finance effort to get visitors

merchants opposed

March 14, 1996|By Gary Gately | Gary Gately,SUN STAFF

Undeterred by opposition from powerful business groups, a state senator wants to authorize the city to impose a new tax on purchases in a tourism district to raise money to attract conventions and tourists.

Sen. Larry Young, a Baltimore Democrat, said the tax on businesses in a "tourism special benefits district" would place the burden for luring tourists and conventions on those who benefit most from the $1 billion out-of-town visitors spend here each year.

The proposal, which has strong support from Mayor Kurt L. Schmoke and the Greater Baltimore Committee, would authorize the city to create an independent tourism "special benefits district authority," to govern the district and foster growth of the city's convention and tourism industry.

The city ordinance could take effect only if approved by a majority of businesses subject to taxes and possible fees. The authority's budget, its leaders and the amount of taxes and fees would be subject to approval from the city's Board of Estimates.

Mr. Young called the lack of money for marketing the city a crisis demanding quick and decisive action.

With convention bureaus in competing cities spending two to three times as much in the increasingly competitive bid for visitors, Baltimore risks losing millions of dollars' worth of potential business because of its meager budget, say state and city lawmakers, independent consultants and tourism industry leaders.

Arguments for increasing the Baltimore Area Convention and Visitors Association's $2.8 million annual budget have taken on heightened urgency with the impending completion of the $150 million Baltimore Convention Center expansion.

"We would be crazy to put that annex there and not have the resources to promote it," Mr. Young said.

Mayor Schmoke looks to the tourism district as a way to resolve the convention association's funding crisis, while giving businesses a say in matters affecting the tourism industry.

"As a business community, we're going to have to just sit down and just rethink our whole approach to this whole question about the use of dollars for promotion of tourism and convention business and the real sources of dollars in the future," Mr. Schmoke said.

Mr. Young's bill comes just weeks after the influential Greater Baltimore Committee, amid heavy opposition from a statewide restaurant group, withdrew another proposed tax. That 1 percent tariff on meals at downtown restaurants would have raised at least $2.5 million a year for the nonprofit agency charged with attracting conventions and tourists to town.

But while supporting the goal of the legislation, organizations representing businesses cried foul yesterday.

The Res- taurant Association of Maryland, the Maryland Retail Merchants Association and the Maryland State License Beverage Association all plan to fight the measure.

"It gives the city the authority, if they so choose, to impose a virtual citywide tax on all businesses," said Brendan Flanagan, a spokesman for the statewide restaurant group. Like other critics, he considers the proposal too broad.

"When you're going to lend even your most trusted friends money, you don't give them your American Express card," Mr. Flanagan said.

Thomas Saquella, president of the merchants association, said he fears the district would result in taxing many businesses that do not rely on the tourist trade, such as appliance stores and jewelry stores outside of the downtown area.

But the GBC pointed out that a tax district would have to be approved by a majority of the businesses, and said that the bill is flexible by design so it can be tailored according to the business owners' desires.

Supporters of the proposed tourism district say it would not only ensure funding to promote the city but also give the industry an independent voice in a broad range of policy matters such as transportation and ways to spread the reach of the downtown tourism centers.

"[The bill] is the first effort to have the tourism industry recognized not only as a biz segment but a geographically localized industry in the city of Baltimore," said Gary Oster, chairman of the GBC's tourism committee and general manager of the Stouffer Renaissance Harborplace Hotel.

"It's the first time that our industry will be able to take control of its own destiny when it relates to issues of funding, infrastructure needed such as transportation linkages, etc."

Pub Date: 3/14/96

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