Mayor seeks new taxi tax compromise as revenues lag

Changes proposed by Mayor Stephanie Rawlings-Blake for Baltimore's controversial and so-far unsuccessful taxi tax drew mixed reviews from city taxi and livery firms.

The proposed amendments to the tax, to be introduced before the City Council today, would switch the levy from 25 cents per passenger to 35 cents per trip for taxis starting July 1.

The city implemented the tax Oct. 1, but many taxi operators simply ignored it, with some complaining and refusing to pay it. Others only began complying after they were allowed to pass the cost on to customers.

Expected to generate more than $100,000 a month on average, the tax has produced just $21,000 in revenue for the city through Wednesday.

Rawlings-Blake said she sees the proposed changes as a "compromise" with private industry leaders based on a shared conclusion that they can handle a tax if it is easier to comply with.

She played down the idea that compromising on an established tax would set a bad precedent, giving companies the impression they can fight unpopular taxes by refusing to pay them.

"While that's a concern, my bigger concern is that I show a willingness to be flexible and to work with the industry," she said.

Dwight Kines, a spokesman for Veolia Transportation, which operates about 550 Yellow, Checker and Sun cabs in the city — or about half the city's fleet — said he welcomes most of the changes.

"Believe me, there are all kinds of advantages of a per-trip fee over a per-passenger fee," he said.

The change will make it easier for companies to check if drivers are collecting the tax honestly, and easier for drivers to pass the charge onto customers without confrontations, Kines said.

The proposed changes would also extend the 35-cent per trip levy to new companies such as Uber and Lyft. Some taxi drivers complained that the months-old tax made them less competitive in Baltimore's changing livery landscape, where passengers are increasingly turning to phone apps and other new technologies to arrange rides.

The changes would also set the fee for limousine and for-hire sedan companies at $1.50 per trip.

Mark Thistel, president of Mount Washington-based sedan service FreedomCar and a leading opponent of the existing tax, called the new rate unmanageable.

"I will be at a competitive disadvantage that's three times bigger than what I thought it would be," Thistel said. The proposed "cost" of shifting to a per-trip model "vastly outweights the fruits of the victory."

"This is a counter proposal that's so onerous, so appalling, that it's designed to make people like me say, 'OK, the original idea wasn't so bad after all,'" said Thistel, who said he participated in talks with the administration but sees the proposal as a snub.

The new per-trip rates would apply starting in July, to give taxi and limousine companies time to work out the changes with the Public Service Commission, which regulates the industry. Uber and Lyft would immediately be required to begin paying the existing tax, officials said.

Neither Uber nor Lyft responded to a request for comment.

Andrew Smullian, the mayor's deputy chief of legislative and government affairs, said the proposals are the product of "a lot of time and a lot of back-and-forth" talks with council members and industry leaders.

The administration's amendments would subsume another bill, filed by Councilwoman Mary Pat Clarke, that sought to retroactively delay the original taxi tax in order to give taxi companies more time to comply.

Smullian said estimates show the new proposed tax structure will raise a similar amount of revenue as the existing tax, which was forecast to bring in $1.3 million a year. That money, part of Rawlings-Blake's 10-year financial plan for the city, was intended to offset cuts to city property taxes and pay for school improvements and removal of blight.

Rawlings-Blake said the city will continue to pursue companies that haven't paid owed taxes to date.

The mayor said she believes some companies were "hedging their bets" by not paying the tax, hoping Clarke's bill to retroactively delay it would pass. The new tax structure, if passed, will likely result in more payments being made, she said.

The changes will be considered during a Finance Committee hearing on Clarke's bill today, officials said.

Clarke said she may try to change when the new per-trip structure goes into effect, but she is generally happy with the mayor's changes.

She also said the problems with the existing tax should never have made it into law.

"The administration and the City Council both need to spend longer, before legislation is introduced, negotiating reasonable approaches to any fees or taxes," she said. "I put myself in that category."

Councilman Carl Stokes, chair of the Finance Committee, said he is also in favor of the changes because they make the tax "fairer and easier."

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