Throughout the process, everything that the City is doing should be up for review. The Mayor’s Transition Team did a good job at identifying existing inefficiencies as well as areas where the City should either cease its involvement or look toward privatization and/or self-sufficiency. Even with all of this - as well as budget-cutting measures such as continuing furloughs and having City employees pay a greater share of their prescription drug benefits - we will have to seek new sources of revenue.
I am sending all of this to you so that you may review it and share your thoughts and ideas. Our City is faced with serious financial problems that demand real solutions. Given the alternatives in terms of the Mayor’s willingness to close most of the rec centers, eliminate the Police helicopters, close seven fire companies, stop bulk trash pickup, and cancel street resurfacing projects, I have to say that simply saying “no more taxes or fees” is just not realistic. So, please take the time to think about each of the proposed revenue bills, why you may be for or against it and, if the latter, what alternatives you suggest. (Don't bother suggesting a commuter tax - we'd love to, but the State legislature won't let us!)
Descriptions of these bills, including the new revenue estimated to be generated, are as follows:
Bill 10-0467 - Hotel Room Tax Rate - $3.9M new revenue
Would raise the tax on hotel charges from 7.5% to 10% of hotel guest charges. Along with the additional $3.9M to the general fund, an additional $2.6M would go to Visit Baltimore, which promotes tourism in the downtown area.
Bill 10-0468 - Local Income Tax - $5.9M new revenue
For persons living in Baltimore City, the local income tax rate would increase from 3.05% to 3.20% of taxable income for 2011 and thereafter.
Bill 10-0469 - Property Tax - Discount for Early Payment - $2.5M estimated “saved”*
Currently, property owners receive a 1% discount on property taxes paid before July 31 and a .50% discount before August 31. This legislation would eliminate all discounts after July 31 and reduces the July discount to .50%.
*The $2.5M savings estimates are based on the termination of August discounts. No estimates yet of July savings.
Bill 10-0470 - Energy Tax-Rates - $8.16M new revenue
To quote the Finance report, “This bill will increase the current Baltimore City Energy Tax by 15%. Additionally, taxes for nonprofit users of energy will be charged the same rate as commercial users.”
Bill 10-0471 - Parking Tax Rate - $5.08M new revenue
Increases the Baltimore City parking tax from 16% to 20% in parking garages, both privately and publicly owned.
Bill 10-0472 - Parking Violations-Fines - $1.68M new revenue
Increases City parking fines by 20% by violation category.
Bill 10-0473 - Telecommunications Tax-Rate - $3.74M new revenue
Increases local tax on phone lines in Baltimore city from $3.50 to $4.00 per line and increases Centrix rates from 35 cents to 40 cents.
Bill 10-0474 - Beverage Container Tax - $11.4M new revenue
Imposes a 4-cent surcharge on non-reusable beverage containers which are sold in Baltimore City. It would NOT include containers of dairy products, non-dairy milk substitutes, beverages containing at least 10% natural fruit juices, and any beverage of 2 liters or larger, but it WOULD include bottled water. It would not include beverage containers for which deposits are paid by consumers and refunds are paid by dealers.
Bill 10-0475 - Bed Capacity Fee - $3.94M new revenue
Imposes a bed capacity fee of $350 per year on every college/university dorm and hospital which is a private, tax-exempt institution.
These bills will all be heard by the Taxation, Finance and Economic Development Committee, of which I am the vice-chair; barring something unforeseen, I will be attending the hearings on all of them. Two hearings have already been scheduled – the Beverage Container Tax and the Bed Capacity Fee will be heard on Thursday, April 22, in the Council Chamber on the 4th floor of City Hall at 11am and 12noon, respectively.
At this point, I am leaning against a “bottle” tax; businesses in our district are at a greater risk of losing sales to county competitors than many others in the City. Also, given that the tax only applies to non-refundable bottles though, I agree with some of my colleagues that we should strongly reconsider mandatory deposits on bottles in Baltimore City instead.
I am also very uncomfortable with the bed capacity fee. While I acknowledge that about 1/3rd of the real property in the City is exempt from property tax and that this places a burden on the rest of us, I think the bed fee is designed inequitably. Any reasonable attempt to get non-profits throughout Baltimore to pay a fairer share of the costs of running this City would not be generating more than a quarter of its total proceeds from Loyola University alone. Plus, given the effort that the surrounding communities have put into getting Loyola to house more of its students on campus - and the cooperation that Loyola has provided – it seems unfair now to penalize them for having done what we asked them to do.
By the way, two other bills - already introduced and in committee - that the Mayor is considering making part of her revenue package are Councilman Curran’s “simulated slots” bill and my own paper and plastic bag surcharge. The simulated slots bill would raise about $1.26M by increasing the registration fees for video poker-style games in bars and stores, which I think makes sense. My bag surcharge bill, however, was not intended to be a “moneymaker” for the City; I promised impacted businesses early on that any funds raised by the surcharge would either stay with the businesses or underwrite “green” programs, like giving all households in the City free reusable bags.
Otherwise, I am currently undecided as to the rest of the Mayor’s revenue package – so I want you to let me know what you think. While I may not be able to do everything that each of you suggest, I promise that I will carefully consider your thoughts and recommendations as we move forward through this difficult process.
Thanks!
- Bill
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The Honorable Bill Henry
4th District - Baltimore City Council
(410) 396-4830 - voice
(410) 659-1792 - fax
Bill.Henry@BaltimoreCity.gov
http://friendsofbillhenry.blogspot.com/
City Hall Office:
100 North Holliday Street, Room 502
Baltimore, Maryland 21202
District Office:
5225 York Road, Suite D
Baltimore, MD 2121
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