City Council members can bottle tax

Council members present alternate revenue plan

May 19, 2010|By Julie Scharper, The Baltimore Sun

Baltimore City Council members said Wednesday that they have devised a plan to cut the city's huge budget gap without implementing a controversial four-cent tax on bottled beverages.

"We do believe we have a workable plan that spreads the responsibility to not just the residents, but the businesses, the nonprofts, the tourists … anyone that's going to have anything to do in and for and with Baltimore City," Councilwoman Helen Holton, who chairs the taxation and finance committee, said at a hastily organized news conference.

Council members plan to swap taxes on video poker machines, billboards and oversized trucks for a portion of the $11 million in revenues that the bottle tax was projected to generate, said Councilman Bill Henry, taxation and finance vice chairman.

Their rejection of the container tax is a victory for grocers, beverage distributors and other business groups that have lobbied aggressively against the proposal, the centerpiece of a revenue-generating package Mayor Stephanie Rawlings-Blake is pushing as a way of avoiding drastic cuts to police, fire and other critical departments.

Rawlings-Blake's revenue proposal — which in addition to the bottle tax includes a $350 annual tariff on hospital and university beds and increases to energy, telecommunications and income tax rates — was expected to generate about $49 million. The mayor detailed $41.5 million in restorations to key services and said she wanted to work with the council to determine the best use for the remaining $7.5 million in revenue.

The council members estimate that their plan would generate about $43 million, enough to reverse cuts to fire, police and recreation centers, with extra funds that they said they would like to see directed to the University of Maryland's Cooperative Extension program, which provides help with urban farming and other programs.

Ryan O'Doherty, a spokesman for Rawlings-Blake, said that the mayor strongly believes that the city needs at least $49 million in new revenue to stay afloat in the tough economy.

"You can't cut and not have an impact," O'Doherty said. "Less revenue means less jobs and less services delivered."

The administration is "looking forward to looking very closely at any revenue measure the City Council proposes," O'Doherty said.

Eight of the 14 council members assembled outside City Hall to show support for an alternate plan, representing a majority that has broken with the mayor over the bottle tax issue even as they vowed to continue working with her to handle the budget crisis.

"This is no fight between the council and the mayor," said Council President Bernard C. "Jack" Young.

Rawlings-Blake has been trying to fund a proposed $2.2 billion spending plan. Without new revenues, she has said, the city would have to cut $121 million from the budgets of such vital departments as police, fire and parks and recreation.

The bottle tax, potentially the most lucrative measure, has also drawn the fiercest opposition. A well-organized coaltion of businesses has launched a pricey campaign of print and radio ads denouncing the tax. Similar ads are airing in Washington, where the City Council is debating a soda tax.

Although few residents have publicly opposed the bottle tax, store owners, particularly those on the city's perimeter, have pressured council members to can the bottle tax, saying it would drive shoppers over the county line.

Ellen Valentino, executive vice president of the Maryland Beverage Association, said "Clearly the news regarding the City Council is good news for Baltimore city's small businesses and families."

The eight council members attending the afternoon news conference seemed relieved to have found a way around the tax, giddily joking and greeting one another with hugs and kisses.

"Do you guys realize I prayed for this and it happened?" said Councilwoman Rochelle "Rikki" Spector, who had just left services at a synagogue.

Councilwoman Mary Pat Clarke grabbed the budget committee chair, Councilwoman Belinda Conaway, as she passed by and pulled her into the group. "It's good!" Clarke told Conaway.

The council members offered few specifics on their plan but said that it was largely based on the package of nine tariffs proposed by Rawlings-Blake.

Their proposal, though, adds three taxes introduced, but not yet ratified, by council members, Henry said, including a billboard tax drafted by Henry estimated to generate $1 million, and an increase on a tax on oversized trucks proposed by Council President Young that could bring in an additional $1 million.

A third measure, Councilman Robert W. Curran's excise tax on video poker machines, is estimated to generate as much as an additional $5 million in revenue, although the finance department has not signed off on that figure.

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