Md. legislators, resisting Linowes effort, prefer gas tax increase

October 09, 1990|By David Conn | David Conn,Sun Staff Correspondent

OCEAN CITY -- The sea air may have distracted some of Maryland's political forces from the prevailing political wind direction these days.

While Congress and the White House battle to avoid the taint attached to raising taxes, the mood is just the opposite here at the beach.

Maryland House and Senate leaders strongly endorsed yesterday the idea of increasing the state gasoline tax, although they would not commit to a specific amount.

And Robert Linowes, chairman of the governor's commission studying the state's tax structure, said the committee's report will recommend broad changes in the state sales and income tax systems that would make them more progressive and result in tax increases.

Mr. Linowes indicated that the report will recommend some kind of sales tax on service industries.

"Manufacturing and production have declined sharply in this state," he said. "Our economy has shifted markedly toward services. Ultimately, this expanding sector must pay its fair share."

He said the state's income tax system -- which imposes a 5 percent across-the-board tax -- "is not presently progressive enough to offset the regressivity of the sales, property and other taxes."

A progressive tax places a greater tax burden on those with higher incomes.

The commission's report will suggest changes in both tax rates and allowable deductions, Mr. Linowes said. If enacted, the changes will raise tax revenues statewide, he added.

Spokesmen for Gov. William Donald Schaefer said he plans to recommend to the 1991 General Assembly a legislative package based on the Linowes commission report.

He won't get much support from the lawmakers, if the comments of those attending the MarylandChamber of Commerce's annual legislative conference here were any indication.

"I really believe that the legislature's not ready to go with any kind of major tax increase," said Laurence Levitan, D-Montgomery, chairman of the Senate Budget and Taxation Committee.

He pointed out that the legislators passed a restructuring of the property tax system last year and that it was unlikely they would be willing to tackle the issue again so soon.

Delegate Ellen R. Sauerbrey, R-Baltimore County, noted that next year there will be "a new legislature. You've got a new [tax restructuring] package coming in November [from the Linowes commission], simultaneously with the budget. You've got no legislative study."

She said the legislature would do better to look into the issue in detail and deal with it in 1992.

"I think it's pretty difficult to ask a legislature at any time to look at something for the first time a month before the session," said Casper R. Taylor Jr., D-Allegany, chairman of the House Economic Matters Committee.

But the governor dismissed many of the objections they raised.

"I'm positive there won't be anything so new and so startling that they can't understand it," Mr. Schaefer said.

"They will understand it," he said. "Don't let it sit on a shelf."

The lawmakers were far more supportive of a possible increase in the state's gas tax, currently 17.5 cents per gallon.

"Regardless of what happens in Washington and regardless of what happens in the Persian Gulf," said Senate President Thomas V. Mike Miller Jr., D-Prince George's, "we're going to have to have a gas tax increase."

The size of the increase would depend on a number of factors, including the federal government's plan to add a tax of 10 cents per gallon, the price of gas at the pumps, and the list of transportation needs that the state presents to the legislature, he said.

David S. Iannucci, the governor's chief legislative aide, said Mr. Schaefer has not yet made up his mind on whether he will ask for a gas tax increase.

Whether Mr. Schaefer supports such an increase will depend on the Department of Transportation's needs and legislators' priorities, said Paul Schurick, the governor's press secretary.

And until those talks take place, he said, the governor will hold off on calling for an increase.

House Speaker R. Clayton Mitchell Jr., D-Kent, said he expected the Transportation Department to request an increase of between 5 cents and 15 cents per gallon.

And Delegate Charles J. Ryan, D-Prince George's, chairman of the House Appropriations Committee, said the request likely will include a range of projects and the amount of tax increases needed to fund them.

The Transportation Department has drawn up a "wish list" of projects that would need $3.5 billion in funding, Mr. Iannucci said.

Every dime's worth of gas tax would raise just over $1 billion in revenue, he said.

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