Voters Face Proposal to Raise Telephone Tax
$17 Million Per Year Could Go to Schools

By Rosalind S. Helderman
Washington Post Staff Writer
Thursday, October 30, 2008

When it comes to ballot questions Tuesday in Maryland, attention has largely been focused on whether voters will agree to allow slot machine gambling in the state.

But Prince Georgians will face an additional question that could be almost as controversial: whether the county should raise the local tax on telephones to pump more money into schools.

County Executive Jack B. Johnson (D) had hoped residents would be paying the higher tax already. Last year, he recommended to the County Council that it agree to raise the tax from 8 percent to 11 percent of phone bills. If council members had agreed, the tax increase would have gone into effect July 1.

Instead, the officials determined that the county charter requires them to send the proposed tax hike to a ballot for voter approval. That means voters will choose Tuesday whether to raise the tax, which applies to business and residential phone lines and includes land lines and cellphones.

Support for the measure in the tightening economy has been muted. A spokesman for Johnson said the executive continues to support the idea and urges voters to approve the measure to provide more funding for schools. County estimates have indicated the tax increase would provide $17 million each year.

County spokesman John Erzen said this year's budget was built on the assumption that voters would not approve the phone tax measure, so the county would not have to plug a funding gap if it were to fail. He said funds from the tax could be particularly useful for the school system in 2010, when the budget picture is expected to worsen.

"You have to look at where we've come from: We've had test scores increase for six consecutive years," Erzen said. "We've made tremendous strides in education, and this money would allow us to continue to do that."

Those who object to the measure argue that an 11 percent levy would give Prince George's one of the highest phone tax rates in the country. A coalition of phone companies has joined civic groups and businesses in an effort funded by the advocacy group MyWireless.org to encourage "no" votes. Mike Little, president of Oxon Hill-based B&W Solutions, said the group is paying to air radio ads. Verizon will insert information about the tax into county phone bills.

Little said he has calculated how much his business would pay for the tax increase, as well as what his cellphone-toting family would pay, and he thinks the increase could be equivalent to one additional month of phone service every year.

"Businesses are struggling already," Little said. "To pile on more costs at this time, I'm totally against it."

Another active opponent of the measure has been Judy Robinson, who in 1996 led an effort to pass the county charter amendment that requires that tax-increase proposals be placed on the ballot for voter approval. She said she is outraged that Johnson tried to persuade the council to raise the phone tax without the referendum and that the County Council agreed this spring to raise the income and recordation taxes without a similar initiative.

Robinson said she is telling neighbors that a school system that recently agreed to spend $36 million on a new headquarters office building does not need more tax dollars.

"There comes a time when everyone must be prudent with their money," she said. "I think it's time the school system and the county government gets realistic about what people have the ability to pay."

Robinson said county leaders are hoping residents will not distinguish the tax proposal from other ballot questions that would allow officials to issue bonds to build schools and parks, measures that are approved routinely. She said the county charter requires listing the tax question first among the ballot measures so it would be more noticeable. Instead, the phone tax question is next-to-last on that section of the ballot. Robinson also said the county should have paid for a public information campaign so residents would know more about the proposal, as the 1996 charter amendment contemplated.

"The way the county executive and the County Council conducted themselves shows why people no longer have trust in government and institutions," she said. "They've done everything they can to hide this tax from people."