Linowes report teaches this lesson: 'It is broke'

December 02, 1990|By Robert Keller

Political pundits and wary legislators alike already have waded in with their views of the report of the Commission on State Taxes and Tax Structure. "DOA -- it's dead on arrival," sniffed one. "They could not have picked a worse time to throw it on the table," griped another.

The Greater Baltimore Committee, representing the region' leading businesses, suggests that it is far too early to begin pronouncing eulogies over the commission's report and its ambitious package of recommendations that will affect the wallets -- and lives -- of every citizen in Maryland.

To those who suggest that action be deferred on the landmar document, the GBC counters that the public debate over the commission's proposals must begin now. The problems identified by the commission, known as the Linowes commission after its chairman, Montgomery County attorney R. Robert Linowes, are real. Dramatic solutions are needed to address those needs, especially the problems of Baltimore City. And they are needed now.

Yes, the times are difficult. There never is an easy time to tackl such thorny political issues as tax reform, fiscal disparity and the lack of adequate revenue to provide essential government services for all of Maryland's citizens, regardless of where they might live.

No politician likes to talk about raising taxes, much les proposing new kinds of taxes. Certainly, the debate might be less threatening if Maryland's economy was thriving, the state and even the most affluent of her counties were not facing their own budget crises, and the national and international economic picture was brighter. But the problems are too urgent to be set aside for better times.

Critics of the report would do well to spend some time reading i before dismissing it out of hand. As significant as the far-reaching proposals for restructuring Maryland's taxes are the reasons behind those recommendations. To those who glibly suggest, "If it ain't broke, don't fix it," the Linowes commission counters, "It is broke."

In sometimes blunt, often elegant language, the commissio outlined problems in Maryland's current system for funding state and local government services. For most policy-makers, the findings probably were not all that surprising. But those findings also called attention to many problems many of those policy-makers would just as soon ignore:

* Much of Maryland's system of taxes is both regressive an inequitable. Simply stated, too many Marylanders are paying too much in taxes, relative to their income. In addition, there are sharp differences in the tax bills of Marylanders with similar levels of wealth, depending on where they live.

* Maryland's poorest subdivisions, most notably Baltimore City have "damagingly high tax rates and unacceptably low service levels" that present a real threat for future economic growth of all of Maryland.

The essence of the commission's recommendations revolv around two deceptively simple statements: 1.) People should be taxed on their ability to pay, and 2.) People in similar circumstances should be taxed similarly. It's difficult to argue with such logic.

Still, there are some who fume that these two statements o essential equity are overly simplistic, if not radical. They suggest that fundamental equity might be fine as some vague philosophical concept, so long as they are not asked to contribute toward achieving that equity. They bristle at the commission's suggestions that people -- not jurisdictions -- pay taxes.

What they fail to recognize is the stiff price they already ar paying for the problems stemming from Maryland's existing tax structures. While the commission carefully avoided building its report around the special needs of the city of Baltimore, there can be no doubt that the problems the commission identified are seen in their starkest forms in the case of the city.

The commission concluded: "It is in the best interest of ever 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."

That Maryland's "heart" is ailing should be well-recognized b now. Statistical evidence of those problems abound:

* Baltimore is home to 60 percent of the state's welfar recipients. Household income in the city is half of the state average.

* Fiscal disparities with the 23 counties are growing wider: th city's yield on a penny on the property tax is only half of the state average; the city collects $131 per person from the piggyback income tax compared with $360 collected in Montgomery County.

* More than half of the entering ninth-graders fail to graduat from city schools, a dropout rate double that of the rest of Maryland.

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