A showdown over hotel tax

Our view : Anne Arundel leaders should reform tax structure

May 23, 2008

A few disciplined and determined Anne Arundel County Council members may have saved John R. Leopold from himself. Through deft budget cuts and the shelving of a few favored projects, the council found $43 million in the county executive's spending plan to meet the school system's needs and spare hoteliers an increase in the room tax. Council members may have satisfied worried education leaders and a vocal business lobby, but they've basically passed the buck for a year.

The real problem is the county's tax structure needs to be overhauled to properly fund public education.

Mr. Leopold was widely criticized for his proposal to increase the hotel tax from 7 percent to 10 percent to help pay for school system employee pay raises. But his plan was a reasonable way to raise new revenues; tourists and not county taxpayers would have foot the bill. But the local tourist industry balked at the proposed tax increase and the lack of notice they say they had about it.

No one wants to pay more in taxes, but Anne Arundel, the state's fifth-wealthiest county, has outgrown its tax cap, which limits additional revenues the county can collect through taxes each year to 4.5 percent or the rate of inflation. This is a county with multimillion-dollar waterfront mansions, an expanding high-tech corridor around Fort Meade and sprawling south county developments - and the fourth-lowest income tax in the state.

The tax cap has become a convenient excuse to scrimp on a county resource that should be nourished: its children. The Board of Education is saddled with $1.5 billion in school maintenance needs that it can't fix. Anne Arundel's student-to-staff ratios are among the highest in the state and have helped drive pupils to a robust network of private schools. Children of families who can't afford such tuition shouldn't be shortchanged educationally because the public schools are strapped.

When Anne Arundel voters approved the tax cap in 1990, this paper predicted it would hobble the county's ability to provide basic services. And it asked, "Do our citizens want good schools and community colleges?"

The question is worth repeating today.

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