Minor privilege, major disincentive  [Editorial]

"Charge 'em for the lice, extra for the mice

Two percent for looking in the mirror twice

Here a little slice, there a little cut

Three percent for sleeping with the window shut..."

—"Master of the House," Les Miserables

A business owner in Baltimore could be excused for feeling like he's living permanently in Monsieur Thénardier's inn from Les Miserables. On top of the highest income and property tax rates in the state, business owners here must contend with the Byzantine set of fees for what are known as "minor privileges" — everything from a table and chairs on the sidewalk outside a cafe to, rather famously, a papier mache flamingo suspended 20 feet above the ground. The list of minor privileges and their attendant fees runs to 18 pages (there are, for example, different fee schedules for 12 different kinds of signs). And their complexity, not to speak of their cost, seems practically designed to discourage property owners from making the kinds investments that you'd think a city trying desperately to grow would be clamoring for.

The City Council, led by Councilman James B. Kraft, sought to wrest some control of this system away from the Board of Estimates, which sets the fees and is controlled by the mayor. The resulting charter amendment proposal, which would have put the council in charge of determining the fees through legislation, prompted Mayor Stephanie Rawlings-Blake to issue her first veto. Her rationale was that the charter amendment would make the system inefficient and that it is unnecessary since her Department of General Services, which administers the minor privileges permit process, is already conducting a review.

The two sides have their arguments about which branch of government is best suited to handle the issue, though the debate shouldn't be over who controls these fees, but whether the city should have them at all.

Baltimore's charter provides that encroachments on that public property like sidewalks and piers by private property owners can be authorized in two different ways. Substantial and generally more permanent encroachments may be granted a "franchise" of up to 25 years through legislation. But minor encroachments may be granted by the Board of Estimates or its designee for whatever fee the board "may consider right and proper."

The rules for minor privileges include some genuine protections for the public. Applicants are required to provide notice to owners of adjacent properties, and the regulations include restrictions to make sure that the encroachments do not materially affect the public's enjoyment of the right of way. For example, the rules for sidewalk cafes mandate a 5-foot, unobstructed pedestrian corridor parallel to the street, and the rules for awnings stipulate that they must be at least 7 feet above the right of way at their lowest point.

But the concept behind the fees has little to do with safeguarding the public. Rather, they are akin to rent charged for the use of public property or — in the case of things like awnings, balconies or giant flamingos over Cafe Hon — the air above public property. The charges vary based on where in the city the property is located and on a variety of factors that relate to the value of the encroachment to the property owner rather than the degree to which it impinges on the public's use of the right of way. The fee for a wall mounted clock, for example, is $7 without advertising but $35.20 with it.

As part of its review, the Department of General Services has determined that Baltimore can immediately stop charging for security lighting, security cameras, bicycle racks and Americans with Disabilities Act-compliant handicap ramps. That's a start, but it leaves more than 90 other categories of minor privilege fees on the books. (Full disclosure: The Sun has an interest here; the annual fee for newspaper boxes is $23.40 apiece.)

In his analysis of the proposed charter amendment, Budget Director Andrew W. Kleine noted that the fees need to be "actively managed to reflect both the current market valuation of the city's rights and properties and to reflect the changing objectives of the city." We would argue that the city's objectives have changed markedly since the fee system was established several decades ago. At a time when Baltimore was booming, it could get away with charging businesses for the privilege of existing within its borders. Now, with a mayor whose overarching goal is to get Baltimore growing again, the city needs to be doing whatever it reasonably can to make itself more attractive to investment. It's fairly clear that the city stands to lose far more in that regard than it gains from the relatively piddling $2.7 million a year it collects in these fees.

DGS Director Steve Sharkey said his agency is taking steps to make the minor privilege process more user friendly and will propose further reductions of some fees and the elimination of others in the coming weeks. But what is the point of having them at all? Baltimore County enters into licensing agreements to regulate most things the city would consider minor privileges but does not charge fees for them. Baltimore should keep the regulations that ensure the public's safety and enjoyment of the right of way but stop nickel-and-diming people for making exactly the kinds of investments the city needs.


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