Proposed cable TV tax killed, deemed illegal under federal law

Measure offered as alternative to bottle tax

May 27, 2010|By Julie Scharper, The Baltimore Sun

A proposal to tax cable television in Baltimore has been yanked by its sponsor after city attorneys determined that federal law would prohibit such a fee.

Councilman James B. Kraft said he decided to shelve the bill and cancel a Thursday afternoon hearing after the city solicitor's office ruled that the city does not have the authority to impose the $4 monthly telecommunications tax on cable service. Kraft had estimated that the tax could generate as much as $10 million in revenue.

The death of the cable tax proposal boosts the likelihood that the bottle tax, which is in legislative limbo, will be approved. Several council members have said that they would support the bottle tax if other efforts to generate the $50 million in revenue needed to restore funding to essential services, such as fire, police, and recreation and parks, failed to pass.

This week, Councilwoman Rochelle "Rikki" Spector, previously one of the bottle tax's most fervent opponents, said that she would support the tariff in the absence of other sources of revenue.

The bottle tax is opposed by beverage distributors and retailers, who say it would drive shoppers out of the city. Residents have not shown up in large numbers at budget hearings to oppose the measure.

Kraft, one of the council's strongest environmental advocates, has suggested a deposit, refundable when bottles are returned for recycling, in lieu of the tax.

The cable tax was one of several proposed by City Council members in an effort to narrow Baltimore's $121 million budget gap without implementing the four-cent tax on bottled beverages proposed by Mayor Stephanie C. Rawlings-Blake.

But in a letter to the council, the Law Department said, "Congress has specifically exempted providers of direct-to-home satellite service from collection or remittance of any tax or fee imposed by a local taxing jurisdiction." The letter further cited a federal law that bars the taxation of Internet access.

Another revenue proposal, however, was passed by a council committee Thursday and will be considered by the full body June 7. The bill would impose registration fees for vacant properties — $100 for residences, $250 for commercial or industrial buildings — and fines of up to $500 for owners who fail to comply. Council President Bernard C. "Jack" Young, who sponsored the bill, said the new fees would generate more than $1 million for the city.

Council members are running out of time to reach an agreement on the budget, which will go into effect July 1, the start of the fiscal year.

This week, Young said the council probably would hold an emergency meeting June 24 to approve the final details of a revenue package.

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