With a 4-1 vote, the Baltimore City Council’s Finance Committee advanced part of Mayor Stephanie Rawlings-Blake’s Comprehensive Plan on Monday. Her proposed 4-cent surcharge on beverage containers will be voted on by the entire Council at the next full-body meeting in less than two weeks. If passed, Rawlings-Blake expects it will generate $11.4 million to fund essential services.
“Their action…brings us one step closer to balancing the city’s devastating $121 million budget deficit,” she said in a statement. “If approved by the City Council, the Comprehensive Plan will fully fund public schools, maintain every single police officer, reduce fire house closures, keep libraries open, and fund after-school programs without raising property taxes.”
The mayor said the tax would minimize the burden on struggling families by excluding milk, juice, and containers 2 liters or larger.
To the mayor’s disapproval, Councilman Bill Henry suggested increasing energy tax rates on all city businesses so all residents would share in the load of raising revenues. If approved this year, Henry said the beverage container tax could cost Baltimore City; local residents would have the option of buying beverages from businesses in Baltimore County. However, he said if the tax were to wait until next year, the county would have time to pass their own beverage container tax which would prevent the loss of city shoppers.
“If we’ve got something that’s going to place us at a geographic disadvantage, let’s wait and do that next year,” Henry said. “I’m not even saying that we just live without the revenue; that’s why I’m trying to find other revenue to make up for it.”
Henry said he is not opposed to the beverage tax, but does not think the Council should rush to approve it. He hopes to look at other ways of increasing revenue over the next two weeks and considers raising the energy tax rates to be a viable method.
“We’re hearing an energy tax in a week,” he said. “Instead of raising money from different industries, such as the beverage industry or the parking industry, let’s acknowledge we need money and we’re going to take it from the entire community.”
In order to generate the same amount of revenue as the 4-cent beverage container fee, energy tax would increase by 88 percent for all commercial users in Baltimore City according to calculations done by the city’s finance department.
“I’m deeply concerned about any alternative that would nearly double energy taxes on all commercial users, including small businesses,” Rawlings-Blake said in response to Henry’s proposal. “This alternative proposal would hurt small businesses and make it much harder to attract new companies and create jobs in Baltimore.”
On the other hand, the mayor said her budget would close the $121 million deficit with an estimated $70 million in spending reductions and $50 million in new diversified revenue minus a property tax increase.
Without additional revenue, the city would be forced to consider closing seven fire companies, laying-off sworn police officers, grounding police helicopters, shuttering dozens of recreation centers and swimming pools, cutting street repair and resurfacing, and abolishing 941 positions, 606 of them currently filled.
“This is the worst budget deficit in the City’s modern history, but I know my Council colleagues are committed to working together with me to solve the crisis by staying focused on real solutions and by doing what is right for Baltimore,” Rawlings-Blake said.