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Grave reservations an issue

February 20, 1997

By GUY FLETCHER

Staff Writer

ANNAPOLIS - Are Maryland cemeteries trying to gain a business edge that other enterprises enjoy or do they just want to charge their customers more?

That was the question Thursday as lawmakers took on the delicate and often-controversial subject of cemetery costs.

At issue was legislation sponsored by Del. John P. Donoghue, D-Washington, that would allow cemeteries to charge interest on "pre-need" burial plots and other funeral services that are purchased before a person dies.

Donoghue argued that cemeteries should be able to offer financing because lending institutions already are permitted to do so.

"The missing piece here is you can go to a bank and finance pre-need but you can't do it through the cemetery," he said.

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Pre-need contracts are a growing trend in the cemetery industry, industry officials testified.

Charles Brown, owner of Rest Haven Cemetery in Hagerstown, said about 90 percent of his business comes from pre-need purchases.

Because the cost can run into the thousands of dollars, many people would prefer to pay off the contract in monthly installments over several years, he said. To administer such plans requires office time and other expenses, which he would like to recoup through interest charges.

"There is a cost," Brown said.

But consumer advocates and others testifying against the legislation argued that cemeteries should not be allowed to charge interest because, unlike a car or home, the customer wouldn't be using the product while paying the financing charges. For that reason, a pre-need contract should be treated the same as a layaway plan, for which interest isn't charged, they said.

They said allowing financing would only increase the cost for consumers.

"Do not subject the consumers of Maryland to this unnecessary finance charge," consumer activist Carolyn T. Jacobi told the House Economic Matters Committee.

But many smaller, independent cemeteries need the finance charges just to stay afloat in an "incredibly cutthroat market," said Devin John Doolan, an attorney representing the Maryland Free State Cemetery & Funeral Association.

"If they are not able to generate reasonable income from their sales, it is less likely they will be able to survive," Doolan said.

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