Bottle tax scare

Our view: Don’t swallow the hype opponents of the city’s container tax are peddling

April 29, 2010

From the ominous words and music in ads against Baltimore Mayor Stephanie Rawlings-Blake's proposed 4-cent-per-bottle tax on beverage containers, you'd think the end of the world was imminent. Nobody likes a tax hike, especially when Baltimore, like the rest of the country, is struggling to dig out of a recession. But opponents of the measure — backed by the beverage industry — are doing everything they can to whip up fears of unaffordable food prices and a flight of jobs from the city if it passes. That's a real disservice to citizens, who are being bombarded with scare-mongering propaganda that shamelessly distorts the magnitude of the problem the city is facing.

Start from the fact that Baltimore City is facing a deficit of some $120 million next year if nothing is done to close the gap between spending and revenues. Mayor Rawlings-Blake's options are more limited than her predecessors' even as the needs have grown greater. But the arithmetic is exactly the same: Either reduce spending through deep cuts in city services and programs, or increase revenues through sharply higher taxes and fees.

To her credit, Ms. Rawlings-Blake has chosen a middle path that keeps the city's property tax rate where it it is — it's already the highest in the state — while calling for modest reductions in programs and services that avoid layoffs of police and fire department personnel and preserve as many city jobs as possible.

In order to accomplish that, the mayor has proposed to raise $50 million in new revenue through increases in taxes and fees on energy and telecommunications and a small rise in the city's income tax rate. All of them hit residents in their pocketbooks, but not by much. The energy tax would add about 60 cents a month to the average household bill — which could be offset by turning the thermostat down by 1 degree — and the phone tax would go up about 50 cents per month; raising income tax rates would cost a median-income household another $3.60 a month. The mayor has also proposed a $350 bed tax on nonprofits such as schools and hospitals that are exempt from city property taxes, a sensible proposal given that unlike in many cities, such institutions in Baltimore currently make no payments in lieu of taxes.

Yet it's the 4-cent bottle tax that has generated the most controversy, even though it's aimed primarily at convenience items and would exempt milk, juice and sodas sold in larger containers, so that families could avoid it by buying the bigger bottles. It's simply not credible to call that a major threat to employment in the city or to imply, as some of the ads do, that people won't have enough money to buy food if the price of a 12-ounce bottle of Coke goes up a few cents.

What opponents of the bottle tax don't say is what the alternatives would be for a city that's staring down a budget cliff if nothing is done. Lay off hundreds of police officers and firefighters? Close more neighborhod rec centers just as summer is arriving? Leave potholes unfilled and trash uncollected?

It's one thing to complain about taxes during a recession, but quite another to come up with a practical plan to keep the city functioning when money is tight. The mayor's plan, painful as it may be in the short run, is a reasonable package of relatively modest measures that will at least keeps city workers on the job and as many programs and services in placed as possible — which is more than the scaremongers can claim for their idea of dropping everything just to sell a few more sodas.

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