$800 million in new taxes sought Administration proposal would implement Linowes

January 31, 1991|By William Thompson and Marina Sarris | William Thompson and Marina Sarris,Evening Sun Staff Jon Morgan contributed to this story.

Lt. Gov. Melvin A. Steinberg said today the Schaefer administration is planning to propose a bill to raise $800 million in new taxes, despite many legislators' reluctance to consider increasing taxes.

The bill, which incorporates all the recommendations of a gubernatorial commission headed by R. Robert Linowes, would include higher income taxes for wealthier Marylanders, a 2 percent annual tax on cars and boats, and expanded sales taxes. The increased revenue would go toward education and transportation projects, while being targeted for poorer areas, such as Baltimore.

Steinberg said Gov. William Donald Schaefer, who was traveling to Texas today, has not given his final approval for the bill. Schaefer has repeatedly said he supports all the Linowes proposals, but has expressed reluctance about introducing the bill himself.

Steinberg said he decided to go forward with the bill to meet a deadline for introducing legislation and to begin debate on the issue. He said the bill could be introduced next week.

Some legislators have been clamoring to see an administration bill, although others have said they do not wish to consider it during the 1991 session.

Steinberg stressed, however, that at least some of the proposals in the bill probably would not pass during this General Assembly session, which ends in April, and likely would be studied later in preparation for action next year.

House Speaker R. Clayton Mitchell Jr. -- generally an opponent of tax increases -- said he would seek a joint hearing with the Senate on the proposal and then submit it to a summer study session. A study session would preclude action on the proposal in this session of the General Assembly.

The Linowes commission proposal "has pluses and minuses and is something we should take back to the constituents," said Mitchell, D-Eastern Shore. "We have to look at our priorities and what our priorities will be three and four years out and what they will cost.

"The distinct message from the voters was they want to know where the money is being spent and, if there's a need for a revenue increase, come back and tell us," Mitchell said.

But Senate President Thomas V. Mike Miller Jr., D-Prince George's, said today he believes the legislature should act quickly on the administration tax bill.

"I'm not a person for delay, " he said. "I think there are portions of the Linowes report that can be enacted this year." However, he continued, the bill is likely to encounter strong opposition from lawmakers and voters opposed to new taxes during the current hard economic times and uncertainty over the Persian Gulf war.

"This might have been the right report four years ago," he said. "But you have to change your thinking in changing times."

A coalition of taxpayers' groups scheduled a news conference for today to oppose any tax increase. "Our position is, until you stop wasting taxes, you shouldn't talk about raising them," said Robert C. Schaeffer, president of the Anne Arundel Taxpayers' Association.

Scheduled to join him at the news conference today were representatives of the Maryland Taxpayers' Association and Alan Keyes, an unsuccessful Republican candidate for Senate from Maryland and head of the Washington-based Citizens Against Government Waste.

Meanwhile, city lawmakers are threatening to oppose any increase in the state gasoline tax unless the General Assembly supports other tax increases to bring financial aid to Baltimore.

Sen. John A Pica Jr. said he plans to introduce a bill to raise about $556 million in new revenues.

Steinberg said Pica's bill would not jeopardize any administration measure and could serve as a "vehicle" to gain support for new taxes in the General Assembly.

The bill drafted by Pica and other city senators would generate the money largely by expanding the state sales tax. All local jurisdictions in Maryland would get some of that money, and Baltimore would benefit from increased school funding and reduced property taxes.

In return for support from other jurisdictions, Pica said, city lawmakers would back a Schaefer administration proposal to impose a 5 percent sales tax on gasoline.

However, if the city's tax bill fails, or the legislature refuses to provide more state aid to Baltimore through other measures, then city lawmakers say they will oppose the gas tax, which generally is seen as desirable in suburban Washington and other areas where new roads are needed.

"You help us and we'll help you. You don't and we won't," Pica said in explaining the strategy.

Senate President Miller added, "Baltimore City is in desperate straits. By my way of thinking, they're entitled to take desperate measures."

"The city's needs are greater than the [state's] transportation needs," said Sen. Barbara A. Hoffman, D-City, who said she would trade her support on the gas tax measure for Pica's bill. "We're kind of in a box and we can't wait any longer."

City officials recently completed a financial plan warning that Baltimore faces massive cuts and shortages unless it receives more state aid. The report says the city will face deficits in coming years, beginning with a $54.1 million deficit for the fiscal year that begins July 1.

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