Attorney general questions legality of Harford's lodging tax provision in state budget

Aberdeen's long-awaited approval for a lodging, or hotel room, tax may have hit another snag, as Maryland Attorney General Doug Gansler has raised a question about the legality of the General Assembly's action in granting Harford County authority to levy such a tax.

The legislature approved a hotel tax as part of an omnibus budget bill approved at the end of its 2014 session in April. Gansler, however, sent a letter mid-May to Gov. Martin O'Malley that calls parts of the budget legislation potentially unconstitutional.

Regarding the Harford lodging tax authority, Gansler wrote that it was inappropriate to include it in the Budget Reconciliation and Financing Act of 2014, which he refers to as BRFA.

He said local government financing in the budget bill is only appropriate "to the extent that the local government financing is incidental to the financing of state government."

"It is our understanding that this provision resolves a long-standing political debate regarding hotel taxes in just one jurisdiction, Harford County," Gansler wrote about the hotel tax. "Although the authorization of a hotel tax is relevant to the financing of local government, it is unrelated to any other provision in the BRFA as introduced or amended, or to the primary purpose of the BRFA, which is to balance the state budget in times of fiscal distress."

Gansler called the hotel tax authorization "not an appropriate subject for the BRFA" but also does not suggest any changes to that authorization.

"We do not, however, recommend any measures to remedy the constitutional flaws in this provision because it leaves to the county the decision whether to impose the tax. Harford County, then, will have to decide for itself whether to attempt to impose a hotel tax based on this provision or to seek a more constitutionally defensible method when next the legislature convenes," he wrote.

County spokeswoman Sherrie Johnson said via email county had not requested adding the hotel tax provision to the state bill and Harford County Executive David Craig is not planning to introduce a local bill to levy the tax during his remaining time in county office. Under the charter, only the county executive can propose a tax, but the county council has the final approval authority.

Both Craig, a Republican, and Gansler, a Democrat, are running for governor this year. Craig's term as county executive ends in early December.

"From a local perspective, however, it would be unfortunate if Harford didn't have the same level of autonomy as every other county with regard to the hotel tax, as this AG opinion seems to suggest," Johnson wrote.

Aberdeen Mayor Mike Bennett had not heard about the letter until it was provided to him Tuesday.

He noted Craig had never intended to submit a local bill and said Aberdeen officials hope to work with the next county executive. State Sen. Barry Glassman is regarded as the front runner in the race for executive.

Bennett and Aberdeen council members had been pushing for the tax for years, noting Harford is the only jurisdiction in Maryland without authority to levy such a tax.

"I made no bones about it that I am going to use it to take the [debt] burden off Ripken Stadium," Bennett said, adding the stadium draws 400,000 visitors annually.

He was not sure immediately Tuesday what Gansler's letter could mean for the levying of the tax.

"I hope it does not mean that much. I really hope that somebody with some [ability] to look in the future would see that this is something Harford County needs," Bennett said.

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