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Projects may feel pinch if tobacco tax must be paid


County officials said yesterday that they may have to freeze $8 million in operating funds earmarked for capital projects if they have to pay Annapolis for 22 years of tobacco tax revenue.

The officials said they were undecided about freezing the entire $8 million but it appears that the county will not put up $100,000 it had allotted for renovation of the historic London Town Publik House in Edgewater. That project also would lose a $275,000 state grant that the county funds were to partly match.

Until 1970, Anne Arundel paid Annapolis one-seventh of the tobacco tax revenue it received from the state. After it became a charter government, the county passed a law to halt the payments. Annapolis received no payments after 1970, and the city has filed suit to recover principal plus interest.

London Town is in the district represented by Virginia P. Clagett, a West River Democrat. She led the successful fight in the House Commerce and Government Affairs Committee against a bill that would have relieved the county of any obligation to pay Annapolis the tobacco tax revenue.

Ms. Clagett was told Wednesday by county officials that the London Town project probably would not be funded, but they gave her no indication that it was in retaliation for her opposition.

The timing of the announcement, and the fact that London Town seems to be the only project singled out by the county, seems suspicious, she said. Ms. Clagett said she was told that other projects would be affected.

"I've never seen funds disappear like that, particularly if they can't say where they're going to," Ms. Clagett said. "It's a real blow for London Town. . . . All it does is hurt other people. I should think it would hurt all their constituents in the county."

County officials say no retaliation is involved.

"We've got to be prepared for the possibility that we're going to lose this lawsuit, and we've got to be ready to pay out this lawsuit if we lose," said Diane Hutchins, County Executive John G. Gary's legislative liaison.

The operating funds that go to capital projects are commonly referred to as "pay-as-you-go" money. The money is used to pay for projects that can be finished quickly, such as road resurfacing, or to buy furniture and fixtures in building projects.

Financial Officer John Hammond said the budget has not been set but that one possibility for preparing for the possible $9 million liability if the county loses the tobacco tax lawsuit is to freeze the pay-as-you-go projects.

Other pay-as-you-go projects include $2.5 million for road resurfacing, $700,000 of the $20 million Broadneck Senior High School expansion and $500,000 in furnishings for the proposed new jail in Glen Burnie.

The money for London Town is almost sure to be cut out of the budget. "I would say, with respect to London Town, while the concrete has not solidified, it's getting awfully sticky as far as that remaining in the budget," Mr. Hammond said. "It's one of those nice-to-do, but certainly not got-to-do projects."

Supporters of the $550,000 London Town renovation say it should be a priority. The 230-year-old building is rotting from the foundation up. Parts of the cellar are crumbling because of moisture.

"It's very hard to lose it all at the end like this, especially when this has nothing to do with London Town," said Ellen K. Rothman, executive director of the London Town Foundation Inc., a nonprofit corporation that manages the 10-acre site for the county.

Even if it loses the county money, the foundation is prepared to raise money to match the state grant. Ms. Clagett noted that Robert R. Neall formed the London Town Foundation as the first of many privatization efforts when he was county executive.

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