Life yet for Linowes Proposals


January 27, 1991|By BARRY RASCOVAR | BARRY RASCOVAR,Barry Rascovar is deputy editor of the editorial pages of The Sun.

IS THE LINOWES commission's report on tax reform "dead on arrival" (DOA)?

Or are parts of the state "dead if Linowes is not passed" (DILINP)?

Top legislative leaders have echoed the DOA pronouncement. Gov. William Donald Schaefer has laid down the DILINP scenario. Their comments indicate another acronym might be more appropriate: LADY -- "Linowes ain't dead yet."

Montgomery County lawyer R. Robert Linowes and his commissioners are generating a tremendous amount of discussion these days in Annapolis. Everyone has an opinion on their recommendations.

Boiled down to the bare essentials they are: 1) raise and truly graduate the income tax to soak the rich and lower rates for the middle class; 2) broaden and raise the sales tax; 3) simplify and cut the property tax; 4) give the extra money to schools and transportation. Net result: a fairer tax system that provides most Marylanders with tax relief.

Revamping tax laws in the midst of a recession seems illogical. Proposing higher taxes after voters tossed out politicians deemed "big spenders" seems contradictory. But in politics, the unexpected often happens.

Maryland's tax laws haven't been overhauled in ages. The tax structure is now regressive, with the middle class paying far too much.

But parochial interests prevent many politicians from rushing to the commission's defense. Montgomery County liberals, for instance, have a hard time arguing in favor of a status quo that socks it to the poor. Yet their affluent constituents would face the stiffest tax hikes. Not surprisingly, few Montgomery legislators openly support Mr. Linowes.

That may change as the General Assembly session progresses. More and more state legislators will have to face the cost of ignoring the Linowes recommendations. When the governor's budget is belatedly unveiled next Friday, large cuts in social services could prompt screams of anguish from needy constituents.

But there's no way to balance the budget in a recession without reducing services and ignoring the pleas of the needy. Will legislators let that happen? When the governor announced earlier plans to fire 1,800 workers and cut aid to dialysis patients, the furor forced him to relent.

How can legislators now avoid these kinds of Draconian cuts that end up harming people? That's where the Linowes reforms come in.

Back home, state legislators face another problem: the recession's impact on the counties is starting to hurt. By the spring, every big county will be contemplating layoffs and service reductions to balance budgets.

How to avoid these massive cuts? Approve the Linowes recommendations giving counties more aid. Chief executives in Baltimore City and Howard, Prince George's and Montgomery counties already have come to that conclusion.

The Greater Baltimore Committee, a bastion of conservative business interests, also has recognized the pluses of the Linowes report. The GBC sees a bleak future without tax reform that paves the way for better roads and schools.

Yet there still is no Linowes bill for the legislature to consider. The governor wants support to build quietly as the logic of the recommendations and the state's fiscal squeeze sink in. The shape of the actual proposal is still weeks away.

Already, one stick of dynamite is being waved by supporters in the state Senate: a filibuster of a gas-tax increase as a way to win the support of gridlocked Montgomery County senators for tax reform. Montgomery's road problems are so severe that failure to bring home more road money is unthinkable. Nor can Montgomery lawmakers ignore the county's $180 million deficit. The Linowes report offers avenues to resolve both problems.

Tax reform's biggest hurdle remains House Speaker R. Clayton Mitchell. He was shaken by the voters' "no new taxes" message in November. He doesn't trust the governor to spend extra funds wisely. And since the Eastern Shore now has its major road projects completed, the Kent County delegate sees no reason to increase the gas tax.

Mr. Mitchell may yet change his tune. Too many of his delegates are desperate for highway money. Other factions could be screaming by the end of March for more county aid and for education aid. Balancing the state budget without inflicting harsh punishment on many Marylanders might be impossible without turning to the Linowes report.

Mr. Linowes and the governor recognize that tax reform is a long-term proposition. The odds are still heavily against the Linowes recommendations in the current General Assembly session. But those odds are narrowing as the fiscal numbers grow progressively worse. This a very determined LADY.

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