House committee abolishes 5% snack tax

Harford officials worried it was threat to Frito-Lay

March 24, 2004|By Ted Shelsby | Ted Shelsby,SUN STAFF

At the urging of the Harford County delegation, the House Ways and Means Committee has eliminated a 5 percent snack tax from its proposed budget bill.

The tax, which would have generated an estimated $16 million a year in revenue, was a major concern of Harford officials, including County Executive James M. Harkins, who said it represented a major threat to a possible expansion of the Frito-Lay Inc. plant in Aberdeen.

With 418 workers, Frito-Lay is Harford County's largest manufacturing employer.

Del. Mary-Dulany James, a Democrat from Havre de Grace, said the committee eliminated the snack tax from the budget bill late Monday.

"Frito-Lay is an invaluable part of Harford County's and Maryland's economy," James said in a statement. "The company provides good wages and employment benefits to many of the county's citizens."

James is credited with spearheading the county's efforts to eliminate the snack tax from the House bill after it was added to the Senate's budget bill at the last minute and with no public hearing.

Harkins said he was delighted by the House action but added: "We still have a few more hurdles to get over yet," referring to the differences between the House and Senate bills, which are to be worked out in a conference committee.

He said that, to his knowledge, the tax affected only Harford County.

Harkins said the House decision "bodes well for 400 jobs in Harford County, and the retention of Frito-Lay seems more secure today."

Charles Nicolas, a spokesman for Frito-Lay, said yesterday that the company was pleased with the committee's action and was looking forward to the full legislature putting "this arbitrary tax to rest, once and for all."

Del. Barry Glassman, chairman of the Harford delegation, said the elimination of the snack-food tax "was good news for the county, but the bad news is that the House is seeking to add another $1 billion in other taxes.

He said James would serve on the conference committee that coordinates the House and Senate bills.

Harkins said Frito-Lay contributes more to Maryland's economy than the snack-food tax would generate.

The company pays $6.5 million a year in state, county and local taxes. It has a payroll of more than $15 million annually, and its average employee salary is $38,000.

Frito-Lay opened a distribution center in Aberdeen in 1993. The next year it added a manufacturing plant, which makes pretzels, Tostitos and Doritos. It has invested more than $115 million at the Aberdeen site.

The company has purchased 100 acres adjacent to its plant for expansion.

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