Arundel Lawmakers Wary Of Tax Plan

March 01, 1991|By John A. Morris | John A. Morris,Staff writer

The state administration has billed it as "tax fairness." But several Anne Arundel County state lawmakers don't agree.

The Maryland Tax Fairness Act of 1991 goes to a joint hearing today before two powerful legislative panels, including the House Ways and Means Committee chaired by Delegate Tyras S. "Bunk" Athey, D-Jessup.

"The way (the administration has) worked it out, it's all peachesand cream and everything is rosy," Athey said. "They maintain (that)everyone will be helped. Well, I don't know how you can help everyone and not hurt someone.

"They have given us the up side," he said."Well, everything has a flip side. It's our job to determine what's flip and what's up."

The legislature's Department of Fiscal Services, which released a report Wednesday on Gov. William Donald Schaefer's $800 million tax restructuring plan, is expected to present the flip side to Athey's committee and the Senate Budget and Taxation Committee this afternoon. (See related story.)

Schaefer appointed a task force, also known as the Linowes commission, in 1987 to study ways to make the state's taxes more progressive and to aid poorer jurisdictions like Baltimore. The bill reflects all of the commission's recommendations released last fall.

The plan would restructure state income tax brackets to make them more progressive; create a 2 percent levy on motor vehicles and boats; increase the sales tax to 5.5 percent from 5 percent and expand that tax to include numerous services such as haircuts and car repairs.

Under the bill, the state would share the estimated $800 million in new taxes with Baltimore City and the counties to pay for education, roads and other government services.

Schaefer administration officials have lobbied strongly for the Linowes package. It would help the state balance its budget at a time when tax revenues are plummeting as well as shift the tax burden from lower- and middle-income taxpayers to those earning more than $40,000 a year, they argued.

Anne Arundel County's state lawmakers have been wary of the tax plan since Linowes unveiled it. And some criticized the administration for using the state budget deficits, which this week reached $500 million, to win its passage.

"I think it would be a mistake to push for some or all of it this year," Senate MinorityLeader John A. Cade, R-Severna Park, said when the session first began. Later, Cade, a Budget and Taxation Committee member added, "I don't think . . . there's a snowball's chance in hell for the full bill to pass."

Last week, Athey agreed, saying parts of the Linowes package, particularly a 2 percent personal property tax on motor vehicles and boats, are "dead on arrival."

"I'm against the Linowes package," said Delegate Elizabeth S. Smith, R-Davidsonville, who is a Waysand Means Committee member. "I want to know exactly who will bear the brunt of that $800 million. While some Marylanders might pay a little more than others, I think everyone will have a tax increase with that bill."

County legislators are particularly wary of the proposed 2 percent personal property tax on motor vehicles and boats.

"The 2percent on boats is ridiculous," said Delegate W. Ray Huff, D-Pasadena. "We have a lot of working people in our district who have boats in the water. They aren't rich or anything, but we're going to tax them. Meanwhile, some guy who lives miles inland has $25,000 in a gun collection and he doesn't get taxed.

"It's unfair that we're taxing one man's pastime but not another's," Huff said.

The General Assembly shouldn't turn the Linowes package "down flat, that's it," Smith said. Instead, she said the two committees should study the bill overthe summer and "make it revenue neutral, so it restructures rather than increases taxes."

Delegate John Gary, R-Millersville, agreed lawmakers need more time to evaluate the proposals.

"The administration and the department heads have done their best to paint the bleakest economic picture possible and scare my colleagues and I into passing those tax increases," Gary said. "But, once you pass a tax increase, you always have to live with it forever."

Gary, a member of the House Appropriations Committee, said he favors slashing the budget.

"I don't know who's going to win, whether my philosophy that you have to have cuts or the governor's doomsday reports," Gary said.

Gary said he also supports separate legislation to create a Linowes-like commission to study efficiency of state operations.

"It's an alternative," Gary said. "If we can spend all this money to look at the tax structure, then we can spend money to look at how government can be made more efficient, other than the governor reorganizing a department every time he gets mad at someone."

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