Linowes report provides vision, but will we look?

PHILIP MOELLER

November 28, 1990|By PHILIP MOELLER | PHILIP MOELLER,SUN BUSINESS EDITOR

We want brave political leadership that's willing to take risks, adopt unpopular positions and govern without constantly worrying about re-election.

Or do we?

The Maryland Commission on State Taxes and Tax Structure, whose final report is due to be formally released today, represents nothing if not a politically brave act.

It contains the kind of bold and long-term vision that business leaders say they want from government but can't get. Further, its significant boost for education spending in general and Baltimore in particular should make it extremely popular among Baltimore executives.

So far, area business leaders seem more apt to worry about their own bottom lines than to make plans to fight vigorously on behalf of the commission's recommendations. The poor numbers being posted at many companies provide a strong reason why corporate wagons are being circled. So does the early demise of some visible city business leaders.

However, without some strong external push, it's tough to see how the commission's bandwagon will get rolling. Early reports from state legislators indicate that many will be running away from the report as quickly as their politically sensitive legs will allow. And for good reason:

* The report, details of which have already been published, recommends a significant overhaul of the state's tax structure that would raise state taxes by more than $800 million a year, including more than $150 million in higher sales taxes about $300 million from new sales taxes on services.

* Despite reductions in local property taxes, nearly $400 million in new revenue would come from what would surely be unpopular taxes on personal property -- cars and pleasure boats. Higher state income taxes on wealthier citizens, although framed as a move to make the income tax more progressive, will not be greeted with cheers, either.

* Most of the new revenues would go to poorer areas in the state, with Baltimore receiving the major chunk of these funds. The city's growing fiscal distress hasn't exactly won over the hearts and minds of legislators elsewhere in the state, creating yet another hard sell for the commission's proposals.

In short, these proposals are hardly timid, self-serving suggestions. Although R. Robert Linowes, a Montgomery County attorney, was chairman of the tax commission, it's generally felt that its recommendations flow directly from the wishes of Gov. William Donald Schaefer.

And, despite the logic of making the state's tax structure fairer, -- it's hard not to conclude that the main job of the Linowes commission was to legitimize a rescue of Baltimore -- thus fulfilling Mr. Schaefer's great wishes for the city he led prior to being elected governor.

Mr. Linowes makes this commitment to Baltimore one of the three fundamental conclusions of his commission's work, in a letter to the governor included in the draft version of the final report.

"It is in the interest of every Marylander that the state's economic, social and cultural center -- Baltimore City -- be in good fiscal health and that it offer a decent quality of life for its citizens. A body cannot function without a heart and Baltimore is Maryland's heart."

The second fundamental conclusion involves education:

"It is in the interest of every Marylander that every child in our state be given the opportunity for a decent education," Mr. Linowes' letter said, "and thus the ability to become a productive citizen. This is both a matter of social justice and an element indispensable to the state's economic future."

This, too, favors Baltimore, as does the third conclusion, which deals with parity:

"It is in the interest of every Marylander that the entire state be in sound economic health. We cannot accept a situation in which certain parts of the state lag severely behind others, dragging the overall economy down."

More money for Baltimore, better education throughout the state (with special emphasis on Baltimore)and the promotion of economic parity for the city are exactly what the city's leaders have advocated for years.

Now, common wisdom holds that it's suicidal to try and push through $800 million in new taxes, especially with a recession coming on. But it's also true that legislative remedies for the city have heretofore been too weak to seriously address its problems. One reason for the shortfall is that added funds for Baltimore have been viewed as coming out of the hides of taxpayers in wealthier counties.

What might work, some wise heads have concluded, is a plan that gives a lot to poor areas but, in the process, also gives something to other counties. By increasing the size of the state's fiscal pie, as the Linowes commission recommends, it's hoped that enough of the anti-Baltimore sentiment might be shelved to move ahead with a broader program.

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