GBC urges sharing of region's revenue, costs Changes would blur political boundaries

January 24, 1991|By David Conn

The Greater Baltimore Committee formally unveiled yesterday a "vision statement" for Baltimore that proposes a dramatic revenue- and cost-sharing plan for the Baltimore region.

The changes, which the GBC members said they had not discussed with elected officials in the area, largely would blur the political boundaries between the city and its surrounding counties.

The plan, which also supports recommended statewide school reforms and the Linowes commission's much-publicized report on state tax reform, would have the city and the surrounding counties share the ben

efits of increases in their tax bases, as well as the burdens of paying for services that benefit the whole region.

Motivating those suggestions is a belief that the state is dependent on the economic health of Baltimore, the GBC officials said.

That is the same reason the group decided to support in full the tax-reform proposals of the Maryland Commission on State Taxes and Tax Structure, known as the Linowes commission for its chairman, Montgomery County lawyer R. Robert Linowes. Those proposals would raise new taxes and shift some of that income to the state's poorer jurisdictions.

Yesterday, GBC President Robert Keller called his group's decision to back the tax-reform proposals of the Linowes commission "courageous."

The Maryland Chamber of Commerce, however, said yesterday that though it agrees with the overall idea of a more equitable tax system, it rejects the specific proposals that would raise new taxes.

The GBC's idea for sharing the tax base, which is included in its report, "The Strength of Maryland Depends on the State of Baltimore," would be to devise a formula "for pooling and distributing all tax revenue growth directly attributable to expansion of the state's business and industrial base," the report said.

In other words, explained Mr. Keller, if one county's tax base grew because of new investment by businesses, for instance, the additional tax revenue should be shared among all jurisdictions in the Baltimore region.

At the same time, "there should be a formula obligating every subdivision of Greater Baltimore to a pro-rata share of the costs of maintaining and developing public facilities, attractions and services which are commonly agreed to benefit the entire region," said the GBC report, subtitled "Vision for a Healthy, Thriving Baltimore City."

The idea, along with the business group's previously announced decision to support the proposals of the Linowes commission, stems from the GBC's belief that the Baltimore region and the entire state cannot thrive if the city lags.

"The center of this state is Baltimore," said Rouse Co. Chairman Mathias J. DeVito, who is chairman of the GBC. "This state is not going to move forward, is not going to prosper, if Baltimore is allowed to decline."

That idea was advanced in the "Baltimore 2000" report from the Goldseker Foundation a few years ago, and that was reaffirmed in the suggestions of the Linowes commission.

Also included in the GBC's "vision" is a plan to share more equitably local income taxes collected by the state under the "piggyback tax." Currently, the state reimburses each county according to how much money its citizens paid in piggyback taxes, which peak at half of the state income tax in some jurisdictions.

The GBC would have the state retain the current distribution method for all money collected through fiscal year 1991, then redistribute new money each year on a per capita basis.

Therefore, counties with fewer people and higher incomes would receive less than less wealthy but more populous jurisdictions such as Baltimore.

In its position paper, the Maryland Chamber of Commerce yesterday declared itself in favor of most of the Linowes commission's suggestions but backed away from any plans to impose new taxes or expand old ones.

The statewide business group said it "disagrees with the magnitude of the proposed tax increases as being inappropriate in the current economic climate."

In particular, the chamber said the plan to raise the corporate income tax to 7.5 percent from 7 percent "is not a recommendation that in any way makes the tax system fairer. It is merely a way to raise taxes."

The group, which represents about 1,700 businesses, also opposed the recommended tax on motor vehicles and boats, a sales-tax increase to 5.5 percent from 5 percent and the idea of expanding the sales tax to include some business services.

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