Billboard companies object to proposed city tax

Baltimore officials say revenue is needed

April 25, 2013|By Luke Broadwater, The Baltimore Sun

Area billboard companies are speaking out against a proposed tax introduced this week by Mayor Stephanie Rawlings-Blake.

In a hearing before the City Council's taxation committee Thursday, the global billboard firm Clear Channel Outdoor offered to give the city more than $1 million in free advertising if the administration would drop plans for a tax on billboards. If not, the company's local general manager said, the city could face a lawsuit.

"Will this legislation stand up to a legal challenge [that could] consequently cost the city more money?" asked Steve Ginsburg, local general manager of Clear Channel Outdoor.

Rawlings-Blake wants to raise about $1 million by imposing a tax on billboard advertisements within the city limits — $15 per square foot for billboards that electronically change images, and $5 per square foot for those that don't.

But Ginsburg said the tax amounts to a hardship primarily on one company. Clear Channel Outdoor owns about 95 percent of the billboards in Baltimore, he said.

"This bill singles out one business," he said. "What message does this send to the business community?"

Ginsburg told the committee his company already gives free ads to several city agencies, including the police and fire departments. Frank D. Boston III, a lobbyist for Clear Channel Outdoor, told the council the value of in-kind services offered by the company is greater than $1.3 million.

Jean Smith, president of Eastern Outdoor Advertising, a smaller Baltimore-based firm, said the tax would cost her business $87,000 annually. She questioned why other forms of media that benefit from advertising dollars — such as newspapers and radio and television stations — aren't facing a similar tax.

"This really is a monstrous burden," she said. "I do object to the discriminatory nature of this bill."

A council vote has not been scheduled on the measure.

The tax is among six pieces of legislation needed to make the mayor's $2.4 billion budget plan a reality. The budget includes property tax cuts and raises for city workers, while closing a $30 million shortfall.

Rawlings-Blake has said her budget represents the initial steps of a 10-year financial plan necessary to fix a long-term $750 million structural deficit. The plan calls for a 22 percent cut in property taxes — a reduction of 50 cents per $100 of assessed value — over the next decade. Rawlings-Blake said she crafted the proposal with an eye toward making the city a more attractive place to live.

At Thursday's hearing, the city's budget director, Andrew W. Kleine, said the government is counting on $1 million from the tax to help subsidize the Maryland Zoo, Baltimore Office of Promotion & the Arts and other cultural organizations. If the city can't raise the money from the tax, those activities could face cuts, he warned.

"You would cut the zoo, Mr. Kleine?" Councilwoman Mary Pat Clarke asked.

"We would have to look at it, yes," Kleine answered.

Councilman Bill Henry, who sponsored a similar bill in past years, also stressed the city is counting on the funds.

"If we as a council don't go forward with it, we will have to live with $1 million worth of cuts," he said.

On Monday, Rawlings-Blake briefed council members on her plans for the tax. She told them any offers for free advertising wouldn't supply the money the city needs.

"The offer of however-many million [dollars] of in-kind services is generous and kind," Rawlings-Blake said. "But it doesn't fill a revenue gap at all."

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