If the Frederick County Board of Commissioners has its way, going to the movies or playing a round of golf might get a little cheaper as the county’s workforce gets a little bit smaller to pay for it.
The five-member board voted 4-0 Thursday to hold a hearing on a proposal that would essentially eliminate the county’s Admissions and Amusement Tax, which applies to various types of recreational activities.
Commissioner David Gray (R) wasn’t present for the meeting.
If approved, the measure would reduce the tax from 5 percent to zero percent. No date was set for the public hearing.
The change would apply to motion pictures, coin and non-coin-operated amusements, amusement rides, golf cart rentals, driving ranges, billiards, golf greens fees and miniature golf.
If the tax were eliminated, the county anticipates a decrease of $774,000 in revenue to the general fund for fiscal 2014, which begins July 1, 2013.
Commissioner C. Paul Smith (R) said he was worried that the lost revenue would contribute to the county’s structural deficit.
But commissioners’ President Blaine R. Young (R) said the county would offset the cost of the cuts by continuing to let the county’s workforce shrink by not filling positions as employees leave.
Currently, the county has 2,141 employees. Young said Friday that he would like to have the number less than 2,000 by the time he leaves office in 2014.
The county loses about 10 percent of its workforce through attrition each year. Although some of those positions are critical and will have to be refilled, some will not, Young said.
Maryland established an admissions and amusement tax in 1936 as a method of funding its welfare program during the Great Depression. It initially placed a 1 percent tax on the gross receipts of athletic events, shows, merry-go-rounds and other recreational facilities. There also was a 1 percent tax on the gross receipts of admissions or cover charges for restaurants, hotels, cafes, night clubs, cabarets, roof gardens “or similar place furnishing a floor show or other entertainment,” according to a memorandum prepared by county officials.
In 1947, the state allowed revenues from the tax to be distributed to counties and municipalities, as well as permitting local jurisdictions to set their own taxes on the amusement facilities within their borders.
In 1971, the tax was changed from a state revenue source to a local one.
In fiscal 2012, Frederick County took in more than $338,000 in taxes from movie tickets and $273,900 in golf greens fees, according to county figures.
There’s no way to ensure that the money saved by eliminating the taxes will work its way down to consumers, but it may convince movie theaters and other businesses to lower their prices, or at least limit any price increases, Young said.
Some people may take the view that movie tickets aren’t a necessity and, therefore, should be open to taxation, but Young disagreed.
“We shouldn’t just tax something [because] we can,” he said.