QUESTION: To tax or not to tax Assembly ready for new session.

January 07, 1991|By William Thompson | William Thompson,Evening Sun Staff Marina Sarris, Laura Lippman and Timothy B. Wheeler contributed to this story.

// When lawmakers descend upon Annapolis Wednesday to begin the 1991 session of the General Assembly, the biggest question they'll face is if they should ask Maryland taxpayers to dig deeper into their pockets to keep state programs afloat.

Money -- the underlying issue of any session -- is surely to be the most contentious matter to come before the legislature this year as state officials struggle to cope with revenues depressed by an economic downturn.

The 90-day session -- the first of a new four-year term for all 188 legislators -- also could produce sparks over proposals to limit development, ban automatic weapons, tighten campaign laws, require some AIDS testing and restructure the ways insurance companies set fees for automobile coverage.

An early revisitation of last year's unresolved abortion question could be the flame that parches the atmosphere of bonhomie usually accompanying the first year of a new term.

Abortion-rights advocates are hopeful they can pass a bill writing into Maryland law the Supreme Court's landmark Roe vs. Wade decision, which upheld a woman's right to have an abortion. But abortion opponents, who blocked similar legislation with a filibuster last year, have vowed to put up another fight.

And proposals to raise taxes are bound to find their way onto the legislative agenda, with state officials still brain sore over how to cope with the unexpected gap between state revenues and expenditures that keeps widening. The gap is expected to make balancing next year's budget a difficult task for legislators and Gov. William Donald Schaefer.

Schaefer so far has managed to keep layoffs of state workers to a minimum as he has slashed agency budgets to close the deficit projected at $423 million for the current fiscal year, which ends next June. The governor still needs legislative approval to spend some of the state's savings and to reduce spending for various programs, including parkland acquisition and agricultural land preservation.

One of the hottest issues is expected to be the Schaefer administration's plan to impose a 5 percent sales tax on gasoline, and to increase titling and license renewal fees. Because of the current economic downturn and unrest in the Middle East, state officials are projecting a $521 million shortfall in transportation revenues over the next five years.

Administration officials already are building support for the new revenues, which could also include adding a few pennies to the state's 18.5-cents-a-gallon tax. And some highly placed lawmakers are riding the steamroller.

"I believe the transportation trust fund in some fashion has to be replenished," said Senate President Thomas V. Mike Miller Jr., D-Prince George's County. Otherwise, "the state cannot stop moving forward in terms of light rail, roads and bridges and maintaining infrastructure."

Because the transportation tax revenues would go to shore up the ailing transportation trust fund, not the state's general fund, there will still be pressure on lawmakers to find ways to expand the general fund.

ANXIETY TIME

Not since 1982 has a General Assembly faced a backsliding economy. Because the state's mandated programs are consuming more and more of the budget, less money will be available for pet projects and aid for local subdivisions, a predicament known to cause anxiety among politicians.

At this point, it's anybody's guess what will happen to new tax proposals. Lawmakers still feel the heat from the general election in November, when voters tossed out of office incumbents they perceived as spendthrifts. But many politicians believe the best time to increase taxes is at the start of a new term, because voters tend to forget who did what to them after four years have passed.

Opponents of tax increases may find solace in statements made repeatedly by Schaefer, whose own special panel to review Maryland's tax structure, the so-called Linowes Commission, has recommended raising $800 million in new revenues.

"I got the word loud and clear -- don't raise taxes," the governor said recently, referring to the November election.

While Schaefer has said he won't include any of the commission's proposed tax increases in his legislative package this year, that doesn't mean he won't support any tax increases if they are proposed by legislators.

"I'm not going to veto any taxes," he said during an informal talk with reporters. "I don't know what I'm going to do."

State House sources predict that some tax bills reflecting the conclusions of the Linowes study may bubble up from within the legislature.

"Linowes should not be looked upon as a bill, but as a blue-ribbon task force looking at a serious problem and coming up with suggestions," said Lt. Gov. Melvin A. Steinberg, Schaefer's point man in the legislature. "It is the legislative process . . . that will form a bill."

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