Schaefer lobbies for Linowes plan

January 10, 1991|By Marina Sarris | Marina Sarris,Evening Sun Staff

When representatives of four major Maryland business groups converge at the Governor's Mansion in Annapolis tomorrow, they will be treated to more than lunch with Gov. William Donald Schaefer.

They will hear a pitch for a plan to raise more than $800 million in new taxes -- a sign of the governor's growing behind-the-scenes role in lobbying for a major overhaul of Maryland's tax system.

Publicly, the governor has said he will not initiate legislation to raise taxes, although he would sign such a bill if it were introduced by a lawmaker and made its way to his desk.

R. Robert Linowes, who headed a gubernatorial commission that recommended increasing and restructuring state taxes, said that at tomorrow's luncheon he will explain his tax plan to 40 to 50 business leaders.

The luncheon guests hail from three business groups, the Greater Baltimore Committee, Maryland Chamber of Commerce and Metropolitan Washington Board of Trade, along with Maryland Economic Growth Associates, a quasi-public economic development group, Linowes said.

Schaefer signed a letter inviting them to the private luncheon, said Linowes.

In addition to hosting the luncheon, the Schaefer administration has hired a special assistant on a contractual basis to help Linowes drum up support for the plan. He is Joseph Adler, a former official with the Maryland Classified Employees Association, a state employees' union, said Paul Schurick, Schaefer's press secretary.

Schaefer's business luncheon is an example of what some State House insiders say is his strategy of trying to build a broad coalition of support for new taxes. Insiders say Schaefer does not want to lead the charge for higher taxes, which voters clearly rejected in the general election last year.

Others contend that Schaefer wants to stir up public debate so the proposal receives a fair hearing, rather than a swift death, in the legislature, where some lawmakers already have promised to oppose new taxes.

After Schaefer unveils his austere budget proposal for fiscal 1992 later this month, the money-raising Linowes plan may seem more attractive, one insider predicted.

The controversial Linowes proposal would increase taxes on wealthier Marylanders and provide more financial help to poorer areas, such as Baltimore.

The proposal would reduce the state's reliance on property taxes, which are not based on income. It would increase the sales tax to 5 1/2 percent from 5 percent and expand the tax to cigarettes and two dozen services. And it calls for higher income tax rates for wealthier taxpayers and a new 2 percent annual levy on cars and boats.

The new revenues raised would go to state and local governments for schools, transportation projects and other needs.

Although he may not back certain specifics of it, "the governor is supporting the Linowes plan and urging others to do so," said Schurick. "The governor is absolutely committed to a plan of tax restructuring and parity."

Lt. Gov. Melvin A. Steinberg said the administration is talking with legislators, county officials and even tax rebels to "zero in on specific problems" they might have and to address their concerns.

Officials in wealthier counties have expressed concern about the Linowes plan because it would increase taxes for many of their constituents, while primarily benefiting residents of poorer counties and Baltimore.

Linowes said he hopes to convince skeptics that they have much to gain by making sure that children in Garrett County and Baltimore, for example, receive a good education and do not become a burden on society. "The welfare of any community is important to the welfare of the entire state," he said.

The Maryland Chamber of Commerce plans to take a position on the Linowes proposal today, spokesman Gene Bracken said. "I would be amazed if we supported an increase in the sales tax," he said, although he did not know what position the chamber would take on other aspects of the proposal.

Baltimore Mayor Kurt L. Schmoke, whose city has much to gain if the tax plan becomes law, said he is hoping for a "fair hearing" on it. "The sense that I get now is that people want to review it, that it's not 'dead on arrival.' I'm optimistic," Schmoke said.

Sen. John A. Cade, R-Anne Arundel, said he hopes the Linowes plan will be deferred for study this summer so lawmakers can take it up next year.

"I think it would be a mistake to push for the enactment of some or all of it this year," said Cade, the Senate minority leader.

"This year, we will be lucky if we get a [gas tax increase] through," he said. "I don't think the climate is right for the enactment of any major tax proposal."

In addition to lobbying behind the scenes for the Linowes plan, the Schaefer administration is expected to push this year for new 5 percent sales tax on motor fuel and other increases in transportation fees.

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