At a City Council meeting last night, politicians debated and discussed the controversial fee and the sorry state of many of Annapolis' sidewalks, but pushed back a decision until at least July 28.

Judging from much of the discussion last night, officials haven't entirely given up on the fee.

But the fee, which the state Attorney General's Office called an unconstitutional tax, will more than likely be rescinded - at least for the time being.

Meanwhile, aldermen are instructing residents not to pay the bill. The city Finance Department is planning to send refunds to the 4,561 property owners who already paid.

The council decided last year to charge property owners an annual fee - $25 for homeowners and $150 for commercial and non-residential property - to fund sidewalk repairs. Property owners received bills in June with little explanation of the fee's function, and many protested. The council debated last night how to fairly fund sidewalk improvements.

After a presentation from the city Public Works Department during the City Council work session, officials said they still were convinced of the need to improve sidewalks.

"We need to develop some type of game plan," Mayor Ellen O. Moyer said during the session. "The issue is still there."

City officials might be leaning toward adopting a resolution put forth by Alderman Richard Israel, D-Ward 1, that would suspend the tax until the 2010 fiscal year.

Finance Director Tim Elliott said the city also will need to figure out a way to refund the $162,275 it has collected as the City Council decides how it wants to proceed.

Also last night, city Administrator Robert Agee and public works officials outlined the most recent survey of sidewalks in need of repair.

Under the fee, the city would raise enough money to immediately start repairing and improving its more than 132 miles of sidewalks, Mr. Agee said. The fee would have collected more than $500,000 for fiscal 2008.

However, the state Attorney General's Office advised the city last week that its fee actually is a tax levied illegally on property owners.

In an advisory letter July 14, Assistant Attorney General William R. Varga said the city's current measure could not be considered a regulatory fee since it was levied to all homeowners indiscriminately, even to those without sidewalks. Therefore, the fee is actually a tax, according to the letter.

Under the Maryland Constitution, any tax imposed by a municipality must receive legislative approval from the General Assembly.

The council discussed other ways to fund sidewalk maintenance, such as dipping into the state highway user tax, or issuing bonds through its capital improvement program.

For generations, the city had been studying ways to fund sidewalk repairs as well as how to deal with any potential liability issues.

Mr. Israel showed the council a newspaper clipping from The Evening Capital from the 1920s that discussed a similar debate on the condition of city sidewalks.

A sidewalk task force put together by the city issued a report in 2004 that recommended the city establish a cost-sharing program with individual property owners to fund sidewalk maintenance, require non-sidewalk developments to pay into a sidewalk fund, or establish a special tax district for sidewalk funding.

The report also said that previous city administrators have warned that people would balk at paying maintenance fees. It also said the city withdrew a bill close to a decade ago that would have turned over responsibility for sidewalks to the city because it would have cost the city millions.

There is another proposal currently still on council's plate that would repeal the fee permanently.

The council is poised to decide on a proposal during its regular meeting July 28.