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Report: Bottle tax increase will lead to job losses in Baltimore

Mayor Stephanie Rawlings-Blake’s plan to increase the container tax by three cents to help fund school construction will result in a new wave of job losses in Baltimore and also harm working families, according to a report released Friday by the Maryland Delaware D.C. Beverage Association.

“It’s unfair. It’s distorted,” said Ellen Valentino, the association’s executive vice president, during a conference call Friday morning.

Baltimore economist Anirban Basu, president of Sage Policy Group, prepared the 16-page report. In it, he says the association does not dispute public school repairs would cost $2.8 billion, as estimated by the American Civil Liberties Union in a 2010 report.

But Basu, a former member of the Baltimore City Board of School Commissioners, said in an interview such repairs should not be made through an increase of the local bottle tax as proposed by Rawlings-Blake this week in her State of the City address.

“How do you fulfill that need in ways that don’t ravage key local industries?” Basu asked. “There is a lack of proportionality. We need to fix the school system physically, but it is hard to square the notion that we should tax one particular industry. It defies logic.”

Rawlings-Blake’ spokesman Ryan O’Doherty refuted the report in an emailed statement.

“It’s no surprise that the beverage industry and their high-paid lobbyists are opposed to the mayor’s plan to increase city school construction funds by 140 percent, but providing new revenue streams is the only way to improve the learning environment for our kids — renovating and build new schools — and that’s what the Mayor is committed to do something about.”

The mayor has said she plans to propose this spring the increase in the container tax, from two cents to five cents, a means to help fund the needed school repairs and renovations.

She successfully pushed through a two-cent tax on many bottled beverages in 2010 in order to balance a citywide budget deficit. Rawlings-Blake had originally proposed a four-cent tax.

Valentino said Friday the total raised over 12 months by that tax was $4.7 million, less than Rawlings-Blake’s estimation of $5.8 million.

After the two-cent tax was imposed, Pepsi Beverages Co. announced that it was halting manufacturing in Hampden, eliminating 77 jobs.

This week, Rawlings-Blake said the increased tax is needed along with other financing options, including bond sales and revenues from a yet-to-be-approved licensed slots facility near M&T Bank Stadium, in order to fund the physical repairs to city schools.

Basu said the total needed to repair all of the city schools based on the ACLU estimates adds up to “$4,500 for every man, woman and child in the city.”

“For a family of 4, that’s $18,000 — you are not going to raise that type of money with a bottle tax,” Basu said. “It is my opinion that five cents can change people’s behavior and they will avoid city businesses.”

In the report, Basu identified two other cities, Greenville, S.C. and New Haven, Conn., that have tackled such repairs without adding new local taxes.

Greenville officials paid for the renovation of 26 schools and construction of 44 new schools over a five-year period through creation of a nonprofit dedicated to overseeing an $800 million bond sale in 2002, the report said.

In New Haven, city officials sold bonds and raised funds for $1.5 billion needed in school construction by selling delinquent tax properties and underutilized and underused city-owned properties.

Valentino said Rawlings-Blake has pushed for a charter amendment in the General Assembly specifying that the container tax be spent on school construction, which the association is planning to fight.

A planned visit by the mayor and her staff to a Coca Cola bottling plant in East Baltimore on Valentine’s Day was cancelled, she said.

“We reached out to the mayor and will continue to do so to make an argument and urge her to look in another direction,” Valentino said.

2 comments

  1. They have money to benefit illegals, they can’t come up with any for the Schools now? You can’t please everyone all the time.

  2. wasnt the monies from the state lottery for schools and roads , where is all that money going, sure isnt to the payouts

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