Wednesday, July 25, 2007

Council leaves phone tax up to voters

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A proposed $17 million telecommunications tax will likely be decided by voters during next year’s November election, after the Prince George’s County Council widely approved bringing it to referendum Tuesday in defiance of County Executive Jack B. Johnson.

Johnson had proposed the tax, which would add $25 per year to the average phone bill, to help fund the county school system.

He argued the tax did not need voter approval, but residents and phone companies protested, saying the tax proposal sidestepped a 1996 measure that requires any new taxes or fees to be approved by referendum.

Johnson argued the measure did not need to go to referendum because the telecommunications tax is authorized by state regulations. The 1996 measure applies to actions by the county government.

Residents and representatives from local telecommunications companies urged council members to bring the tax to referendum Tuesday, while continuing to oppose the rate increase itself.

‘‘The proposed tax increase is both anti-consumer and anti-business,” said Kathleen Kittrick, AT&T External Affairs director, who was joined by representatives from Verizon, T-Mobile and Sprint. ‘‘A tax hike is a disincentive for any company considering locating in Prince George’s County.”

Croom resident David L. Cahn applauded the council’s decision.

‘‘The county executive tried to ram this through without a vote by the people, in violation of the county charter,” he said.

Johnson spokesman Jim Keary said Johnson has no plans to veto the council’s decision. But he said the decision leaves a hole in the school board’s approved $1.65 billion budget.

‘‘[The money] will have to come out of somewhere,” Keary said. ‘‘There’s a hole in the budget and there’ll remain one until the money is appropriated ... similar to if they took $17 million out of the police department.”

The proposal, introduced during this year’s budget approval process, would raise the telecommunications tax rate from 8 to 11 percent.

Johnson said he proposed the tax to help compensate for a slowdown in revenue growth from the housing market. The $2.64 billion budget passed in May without any action on the tax proposal.

The measure to bring the telecommunications tax increase to referendum passed Tuesday by a vote of 7 to 2. County Councilman William Campos (D-Dist. 2) of Hyattsville and Councilman Eric Olson (D-Dist. 3) of College Park were opposed.

Tuesday’s meeting was the last scheduled council session before summer recess. The next scheduled meeting is set for Sept. 11.

E-mail Judson Berger at jberger@gazette.net.