Cell Phone Tax in Baltimore County: A Good Plan or a Wrong Number?

Baltimore County Executive Johnny Olszewski wants to create a new cell phone tax. It’s part of a package of tax increases and fees he says is needed to make up a budget shortfall while at the same time provide the money to pay for pressing needs in the county.

The cell phone tax idea is shaping up to be one of Olszewski’s most controversial proposals.

Shopping at the Randallstown African Food Market on Old Court Road, Oluwaseun Faluyi gave his take on it.

“That sucks,” Faluyi said. “We pay a lot of tax already. And they keep taxing.”

Fellow shopper Amos Ogumbiyi felt the same way when given the details. The tax would be $3.50 each month per cell phone line. Ogumbiyi has four cell phones in his home. So do the math, that would cost him $14.00 a month, $168 a year.

“The phone bills are high already,” Ogumbiyi said. “So why would they have to put more taxes on them?”

But across the street and around the corner at the Sudsville laundromat, Davina McCain had a different point of view. McCain said it sounds like a good deal to her if the tax money helps the community, especially children.

“Anything to keep the kids off the street because they’re a little bit out of control right now,” McCain said.

McCain and the others are Councilman Julian Jones’ constituents. Jones, a Democrat, said he’s been getting a lot of push back, particularly from large families, over the proposed $3.50 per line charge.

Jones said, “And they were basically saying that they felt that they would be unfairly taxed because they have more kids.”

Councilman David Marks, a Republican, said his constituents are upset about it. Marks said there is a certain symbolism to the proposed cell phone tax, because it is an example of the government taxing basic goods.

Both Marks and Jones said they will decide how they will vote on the proposal after the council has budget deliberations.

In his budget message to the County Council April 15, Olszewski explained why cell phones now need to be dinged for a tax.

“As many families have moved away from landline telephones, the county has lost a critical revenue from charges currently placed on those lines,” Olszewski said.

The county said it made more than $13 million off of land line taxes in 2007. This year, that’s expected to drop to around $8 million.

But keep in mind a land line may haver several phones connected to it but it’s taxed only once, while under this proposal every cell phone line is taxed. Daraius Irani, chief economist for the Regional Economic Studies Institute at Towson University, said the proposed cell phone tax is an acknowledgment of new technology

“Land lines are no longer in use as much and cell phones have been taking over,” Irani said.

If enacted, the county expects to collect nearly $30 million from the cell phone tax in the next fiscal year. That’s based on there being almost 700,000 cell phone lines in Baltimore County as well as around 83,000 prepaid phones.

Baltimore City has a cell phone tax of $4 a month. There are no cell phone taxes in Harford, Anne Arundel, Frederick, Carroll, and Howard counties.

But Irani said a cell phone tax might be a new trend.

“Many counties in this state as well as in the nation are facing budget shortfalls,” Irani said.

That includes Baltimore County.

Olszewski is grappling with an $81 million shortfall he inherited, as well as a laundry list of needs from new schools to resurfaced roads. Kill the cell phone tax, then the county council will have to cut that $30 million from Olszewski’s budget.

The Baltimore County Council holds a public hearing on Olszewski’s proposed budget next Tuesday, April 30, at 6 pm in Council Chambers.