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Clear Channel: City ‘billboard tax’ passed only to prevent arts budget cuts

A Baltimore law imposing an annual regulatory fee on outdoor ads was passed by the City Council only to prevent funding cuts for arts and culture programs, according to a company that is alleging it is being specifically targeted by the law.

Clear Channel Outdoor Inc. has paid the city $1.5 million annually since the law went into effect in July 2013, while city budgets for fiscal years 2013 and 2014 included $1 million in billboard revenue that allowed the city to “avoid cutting an equal amount from its arts and culture program budget,” according to the company. The city also enacted an ordinance allowing additional billboard revenue to be distributed by the Creative Baltimore Fund, which gives money to artists and nonprofit cultural organizations.

“In other words, the City is financially penalizing Clear Channel’s disfavored speech in order to support the City’s preferred ‘arts and culture’ speech,” lawyers for Clear Channel wrote in a motion for summary judgment filed in U.S. District Court in Baltimore.

The law charges $15 per square foot of an electronic outdoor display that is 10 square feet or larger and changes images more than once a day. For non-electronic outdoor displays of 10 square feet or larger, the fee is $5 per square foot.

Clear Channel owns several hundred outdoor signs in Baltimore and claims the city has identified only 30 non-Clear Channel billboards that are subject to the law. Baltimore has collected $100,000 from billboard owners other than Clear Channel since the law went into effect, according the company’s filing last week.

Clear Channel filed suit against the city in August 2013, claiming the law limits its commercial speech. A federal judge last year denied the city’s motion to dismiss the lawsuit.

The law states billboards endanger public safety and hinder the city’s ability to collect revenue through other sources. But Clear Channel countered such “hostility to billboards” was only a strategy to ensure the bill became a law because the city has not been able to identify any specific billboard, Clear Channel-owned or otherwise, that causes “safety or aesthetic concerns,” nor has attempted to identify or quantify any lost revenue.

Clear Channel’s motion, filed Friday, also reiterates its opposition to the law on First Amendment grounds. Company billboards in Baltimore have “repeatedly displayed messages” in the last two years for a variety of civic and nonprofit organizations as well as religious groups, in addition to displaying public safety messages.

The billboard fee, however, puts a “unique financial penalty” on the medium.

“The Ordinance gives the City a powerful tool to chill Clear Channel from posting unpopular messages — or messages that are unfavorable to City officials — on its billboards, if it so chooses,” the motion states.

City Solicitor George A. Nilson did not respond to a request for comment.

Texas-based Clear Channel Outdoor is represented locally by Benjamin Rosenberg and Elizabeth Shaner of Rosenberg Martin Greenberg LLP in Baltimore, as well as by lawyers with Sidley Austin LLP in Washington, D.C.

The case is Clear Channel Outdoor, Inc. v. Mayor and City Council of Baltimore, 1:13-cv-02379-GLR.