Budget deadline near; tax plans aired

As the deadline for passing a city budget draws near, Mayor Martin O'Malley is pushing his tax plan, business groups are waging a campaign against it, and City Council members are looking for ways to raise money and cut spending.

Hundreds of e-mail and phone messages protesting O'Malley's proposed cell phone tax poured into City Hall this week at the urging of the Coalition Against Excessive Wireless Taxes.


The coalition - made up of telecommunications companies, industry groups and the National Taxpayers Union - took out a full-page advertisement in The Sun on Tuesday that listed phone numbers for the mayor and council President Sheila Dixon, and urged readers to e-mail city officials.

"We're definitely serious about our opposition," said John H. Johnson, spokesman for Verizon Wireless, which is leading the coalition.


Elected officials who favor a new cell phone tax say they aren't swayed by the messages.

Councilman Keiffer J. Mitchell Jr., chairman of the council's Taxation Committee, said he supports a $1.50-a-month cell phone tax despite the 375 e-mails that had clogged his Blackberry messaging device in the preceding two days.

"I just deleted a whole bunch, and in the last two minutes I've gotten nine," he said.

Mitchell plans to introduce his proposals at 10 a.m. today, when the Taxation Committee is to hold a joint work session with the council's Budget and Appropriations Committee. Other council members are likely to discuss alternatives.

Mitchell favors charging a flat $1.50 monthly fee on cell phones, pagers and land lines, less than half the $3.50 O'Malley has proposed.

Under the mayor's plan, the flat fee would be added to the current tax on land lines, which is 12 percent of each month's bill. Mitchell would reduce the land-line tax to 8 percent unless the wireless industry, which has threatened a legal challenge to the cell phone tax, succeeded in court. In that case, Mitchell's plan would raise the land-line tax to 18 percent.

Mitchell would charge residents and hospitals a 4 percent energy tax, as the mayor has proposed. But Mitchell supports an 8 percent tax on nonprofits, possibly with a ceiling.

Under the city charter, the council must adopt the budget at least five days before the start of the new fiscal year, which will begin July 1. The charter is silent on what happens if the council fails to do so.


O'Malley has proposed new or higher taxes on cell phones, real estate sales and energy, saying they are needed to eliminate a $40 million deficit. Without the new taxes, O'Malley's proposed $2.1 billion budget would reduce fire protection and trash collection, eliminate recycling, shrink library hours and cut more than 500 municipal jobs, including 186 police officers.

Dixon said she is looking for other sources of revenue and savings to balance the budget. She wants to consider raising parking fees at city garages and said she might support cutting trash collection from twice a week to once, saving Baltimore $5 million a year, if the city kept recycling, which costs $890,000 a year.

Some council members suggest adding expiration dates, called sunset provisions, to the taxes. Others want to exempt the first $20,000 to $25,000 of a home's value when calculating real estate recording fees, which O'Malley wants to double. Still others are looking for fat to trim.