County hunts for funds

Tax increases on bingo, rental cars may help offset $200 million deficit

March 02, 2007|By Phillip McGowan | Phillip McGowan,sun reporter

Anne Arundel County Executive John R. Leopold's two requests for tax increases in a week have County Council members braced for more proposals to raise taxes and fees in the two months leading up to the release of his first county budget.

Leopold called Wednesday for raising the gross receipt tax on commercial bingo by 33 percent, from 7.5 percent to 10 percent, which would generate an extra $300,000 a year. On Feb. 21, he asked the General Assembly for authority to levy a tax on rental cars that he said could pull in $3 million to $5 million annually.

County lawmakers acknowledged those revenues would do little to dent a projected shortfall of $200 million annually in operating expenses caused by obligations to fund 10 union contracts, rising retiree health-care costs and a 17 percent increase in school spending.

But with a majority of council members - and Leopold - opposed to raising the county's income tax, some members said they are willing to weigh a variety of revenue options and budget cuts to seek balance.

"This is not a cure-all solution," Councilman C. Edward Middlebrooks, a Severn Republican, said of Leopold's proposals. In the long term, Middlebrooks said, the revenue generated by those measures "is going to be insufficient.

"Ultimately, he's looking at raising current taxes, much as the state is going to do," Middlebrooks said of Leopold. "The question is: How far will the council go to raise existing taxes?"

Middlebrooks said he would not be surprised if a cell-phone tax - an idea floated by Leopold's predecessor, Janet S. Owens - is in the offing. Councilman Daryl D. Jones, a Democrat, said he suspects that Leopold may raise developer-impact fees - an idea that has wide council support.

Leopold, who was elected in November after campaigning on a platform opposing tax increases, emphasized yesterday that while he is considering "other initiatives," he may not need to raise any taxes. He said his tax proposals "avoid a direct hit on county taxpayers" that a raise in the income tax would cause.

"I am taking a prudent approach to looking at the low-hanging fruit before I go deeper into the jungle," he said.

The bingo tax bill, which the county executive will introduce at Monday's council meeting, would bring into alignment the tax being charged on most other admissions and amusements. Leopold said he learned of the tax discrepancy after exploring the presence of video-bingo machines in the county, which was reported last month in The Sun.

Leopold said establishing that balance is more important than any potential financial impact that the county's three bingo establishments would face.

Councilman Edward R. Reilly, a Crofton Republican, said an increase in the tax would not "drive the public away."

"It's a very small annual increase," said Reilly, who supports the bill.

The county collects about $850,000 a year in amusement taxes from Bingo World in Brooklyn Park, Delta Daily Double Bingo in Laurel and Wayson's Bingo in Lothian.

Council Chairman Ronald C. Dillon Jr., Middlebrooks and Jones said they are noncommittal on the bingo tax. Councilman Joshua Cohen, an Eastport Democrat, said he would be "inclined to support" the tax increase if the revenue was used for education.

Dillon said that a tax increase is "a fair consideration" given the concessions the county's three bingo establishments have gotten from Anne Arundel lawmakers in recent years.

A commercial bingo law passed in 2005 allowed for "progressive" bingo, a game where prize totals climb when someone fails to win, and "linked" bingo, a game where players from various locations compete via the Internet, phone or satellite connections. That law also increased the jackpots and allowed for the installation of video-bingo machines. About 200 of these machines are operated at the three sites.

Phone messages left for representatives of Wayson's Bingo and Delta Daily Double Bingo were not returned yesterday. Randy Clemens, general manager at Bingo World, refrained from comment until he learned more about the legislation.

Councilman G. James "Jamie" Benoit declined to comment on the bill and said he would not vote on it, noting that a law partner for whom he works is part-owner of Bingo World. The abstention of the Piney Orchard Democrat effectively serves as a "no" vote that could hurt Leopold's efforts to secure the four votes he needs.

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