Bottle tax wins committee approval

Beverage distributors, store owners organized vigorous opposition

May 03, 2010|By Julie Scharper, The Baltimore Sun

A proposed tax on bottled beverages was approved by a Baltimore City Council committee Monday, despite a well-organized coalition of opponents.

The four-cent tax, estimated to generate $11 million annually, is the most lucrative piece of a $50 million package of taxes and fees proposed by Mayor Stephanie C. Rawlings-Blake.

Beverage bottlers and distributors and store owners oppose the measure and have launched a campaign of print, television and radio ads decrying the tax.

Four of the five members of the council's taxation and finance committee approved moving the bill to the full council, but committee chair Councilwoman Helen Holton cautioned that her vote did not indicate she supported the passage of the tax.

"My 'yes' vote is not indicative of my vote on the tax itself," said Holton. "My 'yes' vote is a vote to move this out of the committee."

But Councilman Bill Henry, the lone committee member who voted against moving the bill out of the committee, explained that that he had reached the opposite conclusion by following similar reasoning.

"I could be convinced to support the measures, but I honestly believe that we should not be rushing this particular vote through before we've heard the other revenue-generating measures," Henry said.

Councilman Carl Stokes, a committee member who voted in support of the bill, said that he could not give his final approval to the measure until the adminstration provided more information about how the revenue would be spent.

"If we were to pass $30 million of the $50 million package, what gets the first dollar?" Stokes said. "We need to know the how and why."

City officials must close a $121 million gap in the $2.2 billion budget by June 30, the end of the fiscal year. The administration presented a doomsday budget that would close the budget gap by slashing funding to fire, police and recreation and parks, but said the cuts could be mitigated if the council approves the news taxes and fees.

Rawlings-Blake had asked the committee to expedite hearings for two tarriffs -- the bottle tax and a $350 annual fee for private hospital and university beds. Henry believes the measures should be considered collectively.

Several council members, including Henry, have proposed adjusting other tax rates to bring in the same revenue that could be generated by the bottle tax.

Henry has floated the idea of raising energy taxes for nonprofits and businesses beyond levels already proposed by Rawlings-Blake. Under his plan, the tax burden would be more equitably shared by all businesses and nonprofits rather than specifically targeting hospitals, universities, beverage distributors and stores.

In a statement, Rawlings-Blake said that Henry's proposal "would hurt small businesses and make it much harder to attract new companies and create jobs in Baltimore."

The city finance department estimated that Henry's idea would result in increases of 88 percent over current energy tax rates for businesses.

Henry said he was surprised by the administration's reaction since the mayor has said she is eager to collaborate with the council on the budget. "I'm happy to work with the administration as long as 'work' has a broader definition than 'just do what you ask us to do,'" he said.

Rob Santoni, owner of a Southeast Baltimore grocery store and a leader of the opposition to the bottle tax, said he was hopeful that the measure would be defeated in the full council vote.

"Just because it moves out of the committee… doesn't mean [the council members] can't change their minds," he said.

julie.scharper@baltsun.com

http://twitter.com/juliemore

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