The Prince George's County Council, seeking to circumvent taxing limitations imposed by TRIM, gave final approval yesterday to a measure that would significantly increase the taxes businesses and utility companies are required to pay on equipment.
The measure enables the county to tax personal property items--such as trucks, typewriters and computers--separately and at a higher rate than homeowners pay for real property taxes. It would raise by 37 percent the personal property tax rate from $2.63 to $3.57 per $100 of assessed value.
Passage of the measure yesterday by a 6-to-2 vote--with one council member absent--marks the first time a Maryland jurisdiction has imposed separate tax rates on real and personal business property. County officials said the action was necessary because the TRIM charter amendment limits the amount of revenues which can be collected from real property taxes.
The new tax on business equipment is expected to raise an additional $10.5 million in revenues.
"I normally don't support increases in taxes, but this is one time when we don't have any choice," said Council Chairman Frank Casula, who supported the measure.
Supporters of the bill maintained that businesses had reaped an unintended windfall of $30 million in the past three years because of TRIM and that without additional sources of revenue, the county might have to lay off police officers, firemen and teachers.
Opponents, such as the Chamber of Commerce, C&P Telephone and the Potomac Electric Power Co., argued that the measure would hurt small businessmen and result in higher utility rates for consumers.
"The people knew exactly what they were doing when they voted for TRIM. They said reduce government spending," said council member Sue V. Mills, who along with Anthony Cicoria voted against the measure. "This flies in the face of that."
Robert Zinsmeister, director of government affairs for the county Chamber of Commerce, said after the vote, "We still believe the long-term benefits to be gained by not initiating this measure are far greater than the short-term benefits that might be realized in the next year or two."
In another vote, the council agreed to review an action it had taken last year that reduced the amount of amusement taxes the Capitals hockey team must pay the county--a measure that opponents said unfairly benefited one county business.
The review measure was passed as a compromise to a bill Mills introduced earlier this year that would have repealed the tax break. Mills said she will reintroduce the original bill later this year.
The review, which passed unanimously, will require Capitals owner Abe Pollin to submit detailed information within the next 90 days on his losses and profits over the past year.
Mills, referring to Pollin, said, "I don't see how we can consider legislation that exempts a certain businessman from taxes," and at the same time approve a measure to increase the tax on business equipment.