Schaefer deploys hefty crew to promote Linowes tax changes

January 13, 1991|By Peter Jensen | Peter Jensen,Annapolis Bureau of The Sun

ANNAPOLIS -- After a meal of flounder, tortellini, asparagus and cake at the governor's mansion recently, a group of business leaders from across Maryland got the $800 million check: a pitch for the Linowes tax report from Gov. William Donald Schaefer.

"There was no pressure, but I think he made his point pretty clear," said Peter J. Lombardi, president of the Maryland Chamber of Commerce and one of about 35 people who attended the 90-minute luncheon Friday. "He'd like us to help get [legislation based on] Linowes through the General Assembly."

In Annapolis these days, it seems that whenever two or more gather, someone else appears to explain the findings of the gubernatorial Commission on State Taxes and Tax Structure.

The commission, chaired by R. Robert Linowes, issued its controversial report last month calling for an overhaul in Maryland's tax structure that would lead to about $800 million in new tax revenue in the first year alone.

In its push to build a coalition of support for the plan, the Schaefer administration has mounted a formidable public relations campaign. The efforts have ranged from informal talks by Mr. Linowes and others to plans for a videotape, a slide show, brochure and the possible creation of a private, non-profit corporation to finance additional lobbying.

In addition, the governor has recruited a former union lobbyist and his own former press secretary to expand the effort.

And Baltimore Mayor Kurt L. Schmoke, whose city would greatly benefit from the proposals, began lobbying vigorously for a fair hearing on the Linowes recommendations in Annapolis even before the legislature convened Wednesday.

"The only way they can do this is with some kind of full-court press," said Delegate Charles J. Ryan, D-Prince George's, chairman of the House Appropriations Committee. "They have to have a wide variety of constituencies to get anywhere on this."

The commission's recommendations would generally lower the tax burden for lower-income wage earners at the expense of the state's moreaffluent households. The report calls for the new revenue to be used for education and transportation and be targeted toward the state's poorer subdivisions.

The report recommends a more progressive income tax system that offers some relief for middle- and lower-income households but hits the rich harder, a 2 percent personal property tax on motor vehicles and boats and an increase in the corporate tax.

It also proposes raising the state's sales tax rate from 5 percent to 5.5 percent and expanding it to apply to various services, including such things as auto repair and tanning salons.

Immediately praised in poverty-weary Baltimore, the Linowes report drew sharp criticism in the more affluent suburbs, where local government officials are grappling with their own recession-driven budget deficits and have little interest in asking residents to pay higher taxes.

In the weeks since the report's release, Schaefer administration officials have faced a formidable task, trying not only to educate a skeptical public and build their coalition of support, but also to do it without any specific legislation in hand.

While urging business leaders, legislators and local government officials to consider the recommendations carefully, the governor has yet to indicate whether he will offer the General Assembly a Linowes bill.

Administration aides say Governor Schaefer is simply undecided over what, if any, of the proposals he will pursue. General Assembly leaders are betting that they will see the full report translated into legislation, however.

"I think the governor intends to introduce an administration package that includes the Linowes commission proposals, and I think he intends to lend his support to these proposals and work actively on their behalf," said Senate President Thomas V. Mike Miller Jr., D-Prince George's.

Whether or not the governor offers a bill, the Linowes report is certain to be debated this session. Sen. John A. Pica Jr., D-Baltimore, has promised to submit legislation adapted from Linowes to aid the city's troubled finances.

Lt. Gov. Melvin A. Steinberg, who serves as the administration's liaison with the legislature, said a painfully austere fiscal 1992 state budget might ultimately force the General Assembly to embrace many of the Linowes recommendations.

The budget, which is not expected to be handed to the legislature until the end of this month, will contain dramatic cuts in some state programs, Schaefer aides have warned.

Daryl C. Plevy, a Schaefer aide, is coordinating the Linowes public relations drive. Joseph Adler, a former lobbyist with the Maryland Classified Employees Association, has been recruited to assist the effort, as has Robert Douglas, a former Schaefer press secretary and now lawyer with Piper & Marbury in Baltimore.

"The governor wants to make sure people understand this report," Ms. Plevy said. "People are just now starting to read it."

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