City Council approves bottle tax

The Baltimore City Council gave its final approval Thursday to a 2-cent tax on bottled beverages, bringing to an end months of heated debate on how to close Baltimore's largest budget gap in memory.

The 2-cent tariff, which is set to expire in three years, represents a compromise between Mayor Stephanie Rawlings-Blake, who had proposed a 4-cent tax, and council members who were pressured to oppose the tax by beverage distributors and store owners.

Baltimore appears to be the only jurisdiction to pass a bottle tax this year. Similar measures were defeated in Philadelphia and Washington following an intense push by beverage lobbyists and retailers.

Beverage industry workers warned that the tax would lead to lost jobs for workers at bottling plants and stores, pointing to a similar tax enacted in the mid-1990s that was repealed after a few years.

"It will affect businesses and jobs just as it did before," said Ellen Valentino, an industry lobbyist, who also cautioned that the tax would prove trying to implement and collect.

But Glennard Middleton, president of the AFSCME union local that represents many city workers, said the tax would protect "real jobs for people who really live in the city."

Officials say proceeds of the tax, which officials estimate at $5.7 million each year, will prevent layoffs of 47 workers and fund street cleaning, graffiti removal and the maintenance of trash-skimming nets in the Inner Harbor.

The council and the city's spending board have passed more than $48 million in new taxes in recent weeks, but about 200 workers still could lose their jobs next week when the fiscal year ends.

Public works director David Scott said it appeared that 11 workers in his agency would lose their jobs, although supervisors were trying to move workers to open positions to avoid layoffs.

The 15-member council voted 8-4 on the bottle tax with Council President Bernard C. "Jack" Young abstaining because, he says, he has a cousin who has worked as a lobbyist for the beverage industry. Councilman Warren Branch was not in council chambers when the vote occurred. Councilman Bill Henry was on a trip that was scheduled before the emergency council meeting was announced.

The measure appeared dead last week after council members deadlocked on the 4-cent tax. But in a surprise move, Councilwoman Helen L. Holton — who had voted against it — proposed the 2-cent compromise Monday after meeting with Rawlings-Blake.

The bottle tax was the centerpiece of Rawlings-Blake's $50 million collection of taxes and fees to narrow the $121 million deficit in the city's $2.2 billion budget.

The process of crafting the city's budget began in February, when Rawlings-Blake showed council members a grim preliminary budget, which included deep cuts to fire, police and rec centers, and her tax package, featuring increases in energy, telephone and income tax rates.

In a marathon series of hearings, council members interrogated city officials on the budget plan and listened to hours of testimony on the ramifications of the new taxes. Yet despite protracted debates, the final spending plan strongly resembles the mayor's original proposal.

Council members also voted Thursday to approve supplemental funding for 10 programs, including the office of cable and communication. That office's budget was gutted in a preliminary budget but will now be able to operate at a minimal level, airing council meetings and hearings and planning commission meetings, officials said.

julie.scharper@baltsun.com

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