Development seems to take precedence

I read with dismay the June 30, article "Robey keeps Rutter on job". My community will never forget, nor should this county forget, how Joe Rutter adamantly opposed the Lazy S alternative for Route 100 in the early 90s during Howard Ecker's administration.

Mr. Rutter felt that putting Route 100 in its current Lazy S location through corn fields would not benefit the county's desire to have a mixed use center at the corner of Route 108 and Old Montgomery Road.

In Mr. Rutter's eyes, shaving off an additional 6 acres from the alignment he supported made the resulting 165 not usable for single family homes or mixed-use development. According to Mr. Rutter, putting Route 100 through the existing development of Hunt County Estates was a far better alternative.

The fact that the Lazy S cost less for the state and county to build, saved an existing community and destroyed the least amount of wetlands were not good enough reasons to favor it, in the light of future development. I know of no instance where future development came so close to taking precedence over existing communities especially when there was an alternative that had everything going for it. It's beyond comprehension.

One thing's for sure, either Dr. Ecker made him do it, or the devil made him do it. Unfortunately, this county's in big trouble if the good chemistry between Robey and Mr. Rutter continues. It takes more than good chemistry to be a good steward of this county.

Whats been lacking is the combination of knowledge, vision and integrity of men and women such as James Holway and Susan Gray. I hope that Mr. Robey takes a closer look at his constituents, justified concerns, based on fact, and does the right thing soon.

Valerie L. McGuire, Ellicott City

Questions raised about commandments

I am puzzled and concerned about the proposals in Congress to post the Ten Commandments in schools.

Presumably, the posting would be more than the frequently used list of ten Roman numerals, suggesting the actual commandments, and would actually spell out the commandments, to give the children the full benefit of biblical guidance.

However, I do not think it would take long for the older children to begin to appreciate that God did not prohibit premarital intercourse among his people, as He did adultery.

If God didn't take this opportunity to enjoin abstinence, what sort of a message will we be giving children by posting the commandments, highlighting that God didn't (and doesn't) consider it a matter of importance.

Perhaps the commandments could be posted with a congressionally supplied addendum speaking to the issue.

Gerald B. Johnston, Ellicott City

Comproller Schaefer on the money with crackdown on sales tax scofflaws

Kudos to Comptroller William Donald Schaefer for his initiative to educate the public about the law requiring payment of sales tax on products bought from out of state and to enforce it.

Capturing the tax revenue lost on Internet, catalog and other out-of-state purchases is imperative for the health of local Main Street retail businesses and for the health of local economies. It is not only a matter of taxes; it is also a matter of fairness. For these reasons, finding solutions to the problem of lost tax revenues and the attendant price advantage from Internet and other interstate sales has been and remains high on the legislative and policy agenda of the National Association of Counties (NACo).

This problem is not only enormous, it is growing faster than kudzu on a sunny hillside. Sales tax is the second largest revenue source in the state's General Fund budget. In fiscal 2000, the sales tax will produce $2.35 billion in revenue to the state. This revenue is equal to more than two-thirds of the state's expenditures for public elementary and secondary schools. It is double the state's spending on public safety. It is, in short, an important component of our tax base. And it is shrinking. In fiscal year 1998, sales tax revenues accounted for 13.7 percent of the state's total revenues; in fiscal year 2000, the sales tax is projected to account for only 13.4 percent of revenues. Without a change in policy, this decline will become even more steep.

Internet's impact

Consider the impact of Internet sales. Maryland's comptroller estimates an annual loss of about $50 million in sales and use tax from untaxed purchases. Nationally, it is estimated that $43.1 billion in Internet sales were conducted last year. By the year 2003, it is projected that U.S. business-to-business commerce on the Internet will total $1.3 trillion. About half of this amount, $650 billion, represents sales to end-users that would be taxed if conducted within the states. An additional $108 billion in direct sales to consumers is expected by 2003, up from $7.8 billion last year. At Maryland's 5 percent sales tax rate, that represents about $37 billion in lost revenues to the state from Internet sales alone. If Maryland's loss of tax revenue grows at this same rate, the $50 million loss in the current fiscal year could grow to more than $1.3 billion in lost tax revenue in just three short years.

The implications of this trend haven't been lost on electronic retailers. Amazon.com, the pioneer online bookstore, offers an easily searchable index of 3.1 million titles, 15 times more than any bookstore in the world, without the costly overhead of buildings and cashiers. Each of its 1,600 employees generates, on average, $375,000 in annual revenues, more than triple that of the top retail bookseller, Barnes and Noble, and its 27,000 employees. Not to be left in the outfield.

As consumers and businesses satisfy their purchasing needs on the Internet, local businesses are left with shrinking customer bases. Tom Saquella, executive director of the Maryland Retail Trade Association, made this point well in his recent letter to The Sun. The effective tax break on Internet sales, allowed by lax non-enforcement of existing sales and use tax laws coupled with the absence of federal policy to promote fair taxation of Internet purchases, gives a substantial, unfair market advantage to electronic-based retailers. Those Main Street businesses that pay local property taxes, collect state sales taxes, and employ Maryland workers are left to play on a field sharply slanted in the favor of their competitors.

A fair answer

The solution is not, of course, to stop electronic commerce. That won't happen, and it shouldn't. But efforts must be made to provide fairness to local retailers and to capture the enormous loss of tax revenue.

Comptroller Schaefer has taken two immediate steps in that direction: He is educating the public about their tax obligation under the law, and he is beefing up his compliance unit to demonstrate that the law is not to be ignored. This aggressive attention is exactly what is needed, not only to capture revenue, but also to capture the publics attention.

Collecting lost revenues will require federal initiative and interstate cooperation, as well as local enforcement. This federal role has been NACo's focus. Internet sales are getting a free ride on a 1967 U.S. Supreme Court decision exempting mail-order catalog businesses from responsibility to collect taxes unless they have physical presence in the state.

Wealthy technology giants recognize the threat to electronic commerce of equalizing the playing field. They have lobbied hard in Congress to avoid imposing any requirement to collect taxes or to pay access fees in lieu of taxes, and they have some success. Last year's Internet Tax Freedom Act, heavily influenced by the technology lobby, exacerbated the problem for state and local governments by placing a moratorium on Internet taxes of all types until October 21, 2001. Recent legislation would amend this act to make the moratorium permanent.

Although laws in Maryland and 44 other states require users to pay the tax that the vendors don't collect, the volume of lost revenue reported by the comptroller is evidence that this is a difficult challenge, even with aggressive enforcement. Until taxes are collected at the point of sale, state and local governments will continue to lose enormous sums. Those lost revenues could be improving public education, enhancing public safety, and reducing reliance on income and property taxes.

NACo will continue to work toward a change in federal policy on this issue. Already, we have some success. In addition to imposing a tax moratorium, the Internet Tax Freedom Act created an Advisory Commission on Electronic Commerce to consider the issue of taxation.

Creating balance

Initially, Congress violated its own law and stacked the commission in favor of the technology industries. Only in the face of a lawsuit by the National Association of Counties and the Conference of Mayors did Congress agree to appoint a more balanced commission.

Here in Maryland, Comptroller Schaefer and I shall meet shortly to forge an alliance to address the issue of fairness in taxation nationally and locally. It is an issue of money. It is an issue of fairness, It is an issue of urgency.

C. Vernon Gray, Ellicott City

The writer is president-elect, National Association of Counties and chairman, Howard County Council.

Pub Date: 7/11/99