Arundel seeks OK on rental car tax

County leaders to ask legislators to grant power to impose levy

February 21, 2007|By Phillip McGowan | Phillip McGowan,Sun reporter

The Anne Arundel County executive is proposing a new tax on cars rented in the county - including at Baltimore-Washington International Thurgood Marshall Airport - that would raise "several million dollars" a year to counterbalance the county's gloomy budget outlook.

County Executive John R. Leopold, who offered the estimate of potential revenue, said he plans to present a letter this morning to the leaders of Anne Arundel's legislative delegation seeking permission from the General Assembly to impose the tax. The letter also is signed by the four Republicans and three Democrats on the County Council.

"It is an option I need to have," said Leopold, a Republican, who ran on a no-new-taxes plank in the fall elections. He said that such a tax would be directed toward tourists and have a "very minor peripheral impact" on county residents.

Leopold and others stressed that he would consider imposing such a tax if all efforts to find efficiencies were exhausted and necessary services could not be maintained without additional revenue.

The bill would provide that only those cars that are rented for less than 180 days could be taxed. Also, according to the bill being presented to Anne Arundel legislators, drivers who rent cars while having their vehicles serviced or repaired would not be taxed. Taxis and limousines also would be exempted.

Other particulars of the tax, such as if it would be levied daily, per rental or as a percentage of the cost of a vehicle, were not included in the proposed bill. County officials said such details would be hammered out later by the council if approval is granted by state lawmakers.

Such measures require the approval of the General Assembly and governor. Even if the enabling legislation passes, council approval is not assured. Although all seven members of the County Council signed the letter to lawmakers, several said they would not necessarily vote to impose the tax.

"Don't assume endorsing of this authority means we want to do it," said Councilman Edward R. Reilly, a Crofton Republican. "I am not convinced yet we need to do this, but we need to look at it."

Ragina Averella, a spokeswoman for AAA Mid-Atlantic, said her organization has not taken a position on the proposal but expressed wariness.

"AAA is always concerned when motorists and travelers face increased taxes, particularly if those taxes are imposed in a way that's not clear," she said.

Beginning in 2001, motorists renting cars at BWI began paying a state fee of $3 a day.

Ronald Reagan Washington National Airport and Washington Dulles International Airport impose county and state rental car taxes. Leopold said that 30 states impose a similar rental tax.

Anne Arundel is bracing for the possibility of $200 million in new expenses annually to the county's operating budget because of rising costs of retiree health care, negotiations on 10 labor contracts and infrastructure improvements in the western part of the county. The current operating budget is $1.1 billion and is limited by a revenue-tax cap to generate new funds.

phill.mcgowan@baltsun.com

Sun reporter Michael Dresser contributed to this article.

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