Bill to relieve county of tobacco tax payment to Annapolis dies


The city of Annapolis' fight to recoup nine years in back tobacco tax revenue from Anne Arundel County will shift from the State House to the courthouse.

A bill that would have relieved the county of any obligation to pay Annapolis more than $9 million in back tobacco tax revenue had won Senate approval and the backing of Anne Arundel's House delegation but was killed Tuesday by the House Commerce and Government Matters Committee.

The dispute now moves back to Circuit Court, where Annapolis filed suit to force repayment of the taxes it says the county should have paid from 1970 to 1992. Judge Bruce C. Williams has heard arguments on Anne Arundel's motion to dismiss the case and is expected to issue a ruling soon.

The failure of the bill is unusual because General Assembly tradition is to follow the wishes of a county's delegation.

Del. Virginia P. Clagett, a West River Democrat, who is the only committee member from Anne Arundel, led the fight to defeat the bill.

Three delegates from the county -- Ms. Clagett, Michael E. Busch and Phillip D. Bissett, all of whom represent Annapolis -- opposed the bill in a meeting of the delegation.

Ms. Clagett said she recommended that the bill be killed because it is a dispute between two local jurisdictions that the state legislature should avoid.

"I understand the arguments on both sides," she said. "My argument was this is a very bad precedent to have the General Assembly to be involved in, to get involved in, matters that are before the judicial system."

Apparently, enough of her colleagues agreed.

Del. D. Bruce Poole, a Washington County Democrat, said, "I can't think of any time in the past where the General Assembly passed a bill that directly on the merits removes a case from litigation."

The bill was introduced at the county's request by Sen. John A. Cade, a Severna Park Republican, to negate the lawsuit filed by the city of Annapolis. The county gave Annapolis one-seventh of the tax on tobacco it received from the state until the advent of charter government in 1965, when the first County Council passed legislation eliminating the sharing of tax revenue. Payments stopped three years later.

Annapolis, backed by an attorney general's opinion, is claiming in its lawsuit that the county did not have the authority to repeal the state law requiring it to share the tax with the city. It is asking for $9.2 million in back payments with interest.

Annapolis City Attorney Paul G. Goetzke said he will concentrate on the lawsuit but that he hopes the matter can be settled with the county through negotiation.

"In many ways, this returns us to where we were before the General Assembly began. It returns us to the courtroom but, more importantly, to the negotiating table," Mr. Goetzke said. "Almost to the day, negotiations were cut off by the county after the [Anne Arundel] Senate delegation vote. And we're hopeful that, as the result of this vote, the county will resume those talks."

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