Steinberg to avoid tax plan testimony, disagreeing with governor on timing

March 01, 1991|By John W. Frece | John W. Frece,Anapolis Bureau of The Sun

ANNAPOLIS C. FRASER SMITH OF THE SUN'S ANNAPOLIS BUREAU CONTRIBUTED TO THIS ARTICLE. — ANNAPOLIS -- Lt. Gov. Melvin A. Steinberg split with his boss, Gov. William Donald Schaefer, yesterday over what course the administration should recommend for its controversial Linowes commission tax restructuring proposal.

Mr. Schaefer wants the bill passed this year. Mr. Steinberg said ++ he was convinced the measure needed to be studied by the General Assembly and subjected to public hearings this summer.

As a result, Mr. Steinberg, who is in charge of the governor's legislative agenda, said he had decided not to testify at a joint legislative hearing today on the tax proposal legislation.

"If I were to testify, the first words out of my mouth would be to recommend that the bill go to summer study," Mr. Steinberg said, although he would underscore the need for a change in the tax structure.

The lieutenant governor said he met privately yesterday afternoon with Mr. Schaefer and R. Robert Linowes, the Montgomery County lawyer who chaired the Governor's Commission on State Taxes and Tax Structure, to discuss today's strategy. He said the governor still wanted "the whole ball of wax."

"He's the governor, and he feels very strong about that," Mr. Steinberg said.

"I respect that, but I have to go with what I believe. If someone asks me a question, I have to be honest; I have to answer truthfully."

"The bill is comprehensive and complex, with a lot of issues unanswered," he said. "And now there's a counter analysis [by the General Assembly] that rebuts a lot of the conclusions. It really points out more than ever that with this uncertainty, there's a good chance it will go to summer study."

The Linowes commission recommended raising and expanding the state sales tax, making the personal income tax more progressive, creating a new personal property tax on cars and boats and making numerous other adjustments to state taxes. By the commission's estimate, the proposals would raise more than $800 million in new revenue its first year alone, much of it to be redistributed to the poorest jurisdictions in the state.

Mr. Steinberg said that because of their difference of opinion, he suggested the governor have David S. Iannucci, Mr. Schaefer's chief legislative officer, and Daryl C. Plevy, an executive assistant to the governor, testify before the Senate Budget and Taxation and the House Ways and Means committees today.

At a briefing yesterday, Mr. Iannucci insisted that the Linowes package was fundamentally sound, "mainstream," progressive and,above all else, fairer than the existing tax structure. He defended it against suggestions in a new report by fiscal analysts for the General Assembly that the tax commission's representations about the plan's tax advantages to Marylanders were overstated.

Mr. Iannucci said the administration's primary claim had been that the Linowes proposal would mean a tax savings for about two-thirds of Maryland's taxpayers.

Addressing the legislative report's suggestion that certain categories of taxpayers would not fare as well as the Linowes commission predicted, Mr. Iannucci said such views depended on a number of assumptions about personal choices -- how many cars a person drives, whether he smokes, or owns a boat, or

other factors that would be affected by tax changes.

He said he did not want to get into a war of statisticians, acknowledging that the legislature's analysts had their assumptions and the commission had its assumptions.

However, Mr. Iannucci and Jay Ladin, a staff assistant to the commission, conceded that there was no accurate way to determine what a typical family would pay or save in taxes from the Linowes plan.

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