Washington County Commissioners double down on keeping amusement tax authority

The 2022-26 Washington County Board of Commissioners. From left, Commissioners Vice President Jeff Cline, Wayne Keefer, Commissioners President John Barr, Derek Harvey and Randall Wagner.

The Washington County Commissioners renewed their opposition Tuesday to a bill in the Maryland Senate that would repeal the county's authority to impose an admissions and amusement tax.

Sponsored by Sen. Paul Corderman, R-Washington/Frederick, the bill would remove Washington County and its municipalities from a statute authorizing local governments in Maryland to charge the tax, which can be charged at any rate up to 10%.

If the bill were approved by the Maryland General Assembly, Washington County would be the only county in the state to be exempted.

Corderman had sought the commissioners' endorsement for the bill, but they decided during their meeting Feb. 14 not to support it, although they asked County Attorney Kirk Downey to draft a letter to Corderman saying they would consider eliminating the tax themselves.

Background:Commissioners balk at bill to remove amusement tax, but want to drop it themselves

But Corderman told Herald-Mail Media he thought that approach was "going to be problematic, because now you're gonna set up a system of almost competitive imbalance within our county."

So he sent them a letter Monday asking that they reconsider. He included a table showing the revenues that taxes generate both for the county and in the municipalities that charge them.

"As you will see, regardless of the size of the municipality or the County as a whole, the A&A tax revenue is a miniscule amount in comparison to the overall general funds of each respected entity; with an approximate average revenue share of 0.5%, or better explained as half of one percent of any potentially affected entity," he wrote. "Essentially, 99.5% of a municipality’s (or) the County’s general fund revenues would remain unaffected."

Washington County's current admissions and amusement tax rates are set at 3% for bingo and 5% for other activities. The municipal rates, which would be unaffected by any action the county took on its own rate, range from 1% to 10%.

Tax collection varies from Smithsburg to Hagerstown

According to figures Corderman's office collected from municipalities that impose the tax, revenues ranged from $488.98 for Smithsburg, to $587 for Funkstown, to $14,731.40 for Boonsboro, to an estimated $250,000 for Hagerstown in the last year.

Revenues collected from the county's admissions and amusements tax generated $319,188 in 2022, according to Corderman's office.

But the commissioners remained unmoved.

Commissioner Derek Harvey said the board needed to consider how the impact repealing their authority to impose the tax would affect municipalities.

"It could be going up in the future with the baseball stadium for Hagerstown's perspective," he said, referencing the facility currently under construction downtown. "Boonsboro gets $14,000 a year. We get asked a lot for small amounts of money in the municipalities.

"These small amounts matter, and it adds up," he said.

If the tax were cut, he argued, it probably would not have much of an impact on consumers, he said.

"But I'm not sure we know what the real impact is gonna be on businesses," he said. "I for one have not heard from one business person yet, or constituent, asking for the amusement tax to be cut."

The money generated can defray costs, for example, for The Maryland Theatre or other amenities that depend on county contributions, he said.

"This is asking us to take a cut, and then we have to find a way to replace it from somewhere else in the budget, he said. "They may seem like small cuts to someone in Annapolis, but they impact our decision-making here where the rubber hits the road."

Commissioner Randy Wagner agreed with Harvey's assessment, suggesting that if the municipalities lost that revenue, they would ask the county for money to help make up the losses.

"So it's more of an impact on the county government here than what we might think," he said.

Downey said that as directed at the last meeting, his office had drafted a letter to Corderman opposing the bill but it had not yet been sent.

The letter says the commissioners are "considering whether to terminate the collection of the admissions and amusement tax here in Washington County, however the board would like to retain the authority to impose or forgo the tax based on future economic conditions. And the board further believes that municipalities in Washington County should have the same policy discretion."

The commissioners agreed to send the letter as drafted.

The bill is scheduled for a hearing in the Senate Budget and Taxation Committee next Tuesday.

This article originally appeared on The Herald-Mail: Washington County balks at Corderman's plan to eliminate tax authority