Tax plan foes air views at City Hall

Nonprofits tell panel that energy levy would hinder their work

May 25, 2001|By Neal Thompson | Neal Thompson,SUN STAFF

Wayne Alfurqan has an idea for handling some of Baltimore's budget woes, and the 100-plus attendees crammed yesterday into a City Hall hearing room to discuss proposed tax increases enthusiastically endorsed it.

Addressing the City Council's Taxation Committee - which met to hear testimony on Mayor Martin O'Malley's plan to raise the city's income tax and impose an energy tax on nonprofit organizations - Alfurqan suggested that O'Malley and the council "take the first hit."

He said O'Malley should cut his staff, and that the City Council should give back the 30 percent raises its members approved for themselves in December 1999.

"You want the people to take a cut? You all should take a cut, too. We need to take the hit together," said Alfurqan, a member of the Cherry Hill Coordinating Council, whose comments elicited applause and cheers.

Alfurqan was joined by priests and ministers, homeowners and hospital workers in soundly rejecting the notion of raising taxes or imposing new taxes in a city already burdened with a high property-tax rate.

Although yesterday's lengthy hearing didn't attract the throngs that some had predicted, the opposition to O'Malley's budget-balancing tax proposals was vocal and persistent.

O'Malley has proposed raising the city's income tax by 20 percent and expanding an 8 percent tax on energy use - now assessed only on commercial businesses - to include thousands of nonprofit organizations. The two measures, O'Malley has said, would raise millions and help him balance his budget and avoid mass layoffs.

Some opponents said the new taxes would drive people out of the city.

"Baltimore is going to see more people, maybe some in this room, move across the line into Baltimore County," said Daniel Loden, vice chair of the Baltimore Homeowners Coalition.

Yesterday's show of public opposition to the plan will be no surprise to O'Malley, who has met in recent weeks with church leaders and others who will be affected by the energy tax, including officials at the Johns Hopkins University and Health Systems.

But those opponents - particularly church leaders, who have been the most vocal - are hoping their words will persuade City Council to reject the mayor's proposals. Some council members have said they might consider amending the mayor's tax plan, possibly by phasing out the taxes once the city's budget is stronger.

The Rev. Gregory B. Perkins, head of the Interdenominational Ministerial Alliance, said yesterday that any compromise would be "totally unacceptable" to most city church leaders.

Peter Berns, who heads the Maryland Association of Non-Profit Organizations, testified that "it makes no sense" to tax organizations that provide valuable services to the homeless, hungry, ill and drug-addicted in the city.

"If you tax them, it is going to mean a reduction in services to the citizens of Baltimore," Berns said.

Pegeen A. Townsend, senior vice president for legislative policy with the Association of Maryland Hospitals and Health Systems, said Baltimore's hospitals are all nonprofits and the rates they charge patients are established by the state. That makes it difficult for them to recoup the dollars they'll have to pay out for the new energy tax.

"Every dollar you take away from a nonprofit is a dollar less that they can provide in services," Townsend said.

The Taxation Committee plans to meet next week to decide whether to approve or amend the tax proposals. If approved, the proposals would go to the full council for a vote.

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