City tax district in uphill fight Proposal is opposed by 2 key legislators

March 21, 1996|By Gary Gately | Gary Gately,SUN STAFF

Hoping to win over opponents of a city tax district designed to raise money for attracting tourists and conventions, the Greater Baltimore Committee proposed yesterday shrinking the district while excluding stores and bars that serve little food.

But the business group's attempt to forge a compromise failed to sway opponents, including two key state legislators and the Restaurant Association of Maryland.

The GBC's move, which came at a meeting in Annapolis with state senators representing Baltimore, amounted to a last-ditch attempt to win passage of a state bill that would allow the city to create a new tourism district.

Under the bill, sponsored by state Sen. Larry Young, a Baltimore Democrat, the district would be governed by an independent authority that would collect taxes and possibly other fees from businesses.

Donald P. Hutchinson, the GBC presi- dent, acknowledged considerable opposition to any new taxes. But he said the lack of marketing money for the Baltimore Convention and Visitors Bureau seriously jeopardizes the city's $1 billion-a-year tourism and convention trade.

Mr. Hutchinson noted that convention bookings, generally made three to five years in advance, plummet by 1999, despite the impending completion of the convention center's $150 million expansion and renovation.

He warned of possible layoffs resulting from declining business downtown and an increase in the city's hotel tax that would kick in automatically unless additional revenues generated by the expansion cover principal and interest on financing the city's $50 million share of the state-city project.

"We're in trouble," Mr. Hutchinson said. "We're trying to come up with any kind of solution to raise the kind of revenue we need."

Neither Mr. Young's bill, which has the strong backing of Mayor ** Kurt L. Schmoke, nor the proposed amendments specify a tax rate or other fees or precisely who would be included. Such details would be left to the district authority, subject to city approval.

But Mr. Young and the GBC hope to raise enough revenue to nearly double the convention and visitors association's $2.8 million annual budget, now only half to a third of many competitors'.

Other amendments proposed by the GBC would restrict the district to downtown, Little Italy, Canton, Fells Point and parts of Federal Hill. Under Mr. Young's bill, the district could extend much farther.

The proposed amendments also would exclude retail stores and bars whose food sales comprise 30 percent or less of total business. Some of the retail stores already are included in the Downtown Partnership special assessment district, which raises money to fight crime and grime and to attract suburbanites downtown.

Restaurants, hotels, museums and other attractions and transportation providers in the district could be subject to taxes and other fees, under the bill and the proposed amendments.

Two state senators, whose districts would include parts of the tourism district, refused to budge from their opposition.

Sens. George W. Della Jr. and Perry Sfikas, both Baltimore Democrats, said their stance reflected the opposition among business owners in their districts. Both also asserted that the city should commit more of the estimated $8.7 million a year in hotel tax revenue to marketing the city.

"It's obviously very clear from Fells Point and Little Italy that there's just absolute and total opposition," said Mr. Sfikas, who represents both communities. "A tax is a tax is a tax. The city collects a 7 percent hotel tax, and that money should be going for promotion."

The city, one of the few in the nation with no dedicated source of funding for its convention and visitors bureau, now spends about $2 million a year on the association.

The hotel room tax flows into the general fund, and the portion of that money spent on marketing has declined steadily.

But Mayor Schmoke said the city cannot afford to spend any more of the hotel tax on the visitors' association.

"He says he doesn't have the money, and I believe him," Mr. Hutchinson said. "You guys know better than anybody what the city's dealing with day in and day out."

Senator Young said he would consider the proposed amendments before the city's senators take up the bill next week.

Pub Date: 3/21/96

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