Schaefer bill for revamping taxes dead for 1991, Levitan says

March 02, 1991|By C. Fraser Smith | C. Fraser Smith,Annapolis Bureau of The Sun

ANNAPOLIS -- The major Schaefer administration bill to raise more than $800 million a year while restructuring Maryland's taxing and revenue distribution system is almost certainly dead for the 1991 Assembly session, according to Sen. Laurence Levitan, D-Montgomery,

chairman of the powerful Senate Committee on Budget and Taxation.

During a hearing on the bill yesterday, Mr. Levitan said the administration's proposal was simply too complex for consideration this year.

"I don't think that's going to be able to be accomplished . . . this session," he said.

Asked later if the bill was dead for 1991, Mr. Levitan said, "Yes."

House Speaker R. Clayton Mitchell Jr., D-Kent, later said he agreed with Mr. Levitan's assessment.

NTC The bill's dim prospects grew worse yesterday despite testimony from Gov. William Donald Schaefer, who braved the epithets of anti-tax protesters to make a personal appeal for the bill.

TH With chants of "Recall, Recall" ringing in his ears, the governor of

fered a list of urgent needs that he said demanded the passage of the massive revenue measure.

From the costly hospital care of crack-addicted newborns to the housing needs of the elderly, Mr. Schaefer said, state government faces pressing demands for services -- and a

dwindling supply of cash to pay for them.

"I don't think we can wait another

year," the governor said, one hand tightly gripping the witness table.

He spoke before a joint hearing of Mr. Levitan's committee and the House Ways and Means Committee. The two panels were together for testimony on tax restructuring proposals made by the Linowes commission, a panel of businessmen, educa

See LINOWES, 8A, Col. 1 LINOWES, from 8A

tors and union representatives appointed by the governor to study Maryland's tax system.

The commission recommended an increase in the sales tax -- from 5 percent to 5 1/2 percent -- a more progressive income tax and new taxes on services -- enough to raise more than $800 million a year.

David S. Iannucci, the governor's legislative director, was asked after the hearing if the administration was ready to concede that the bill had no chance this year. He said he did not wish to add anything to Mr. Schaefer's appeal.

The governor said he was testifying yesterday so as to leave no doubt about his support of the bill. On Thursday, Lt. Gov. Melvin A. Steinberg, who had been asked to push the bill for the administration, told the governor he thought the bill could not be saved this year.

0$ Significant damage was inflicted

on the proposal's chances earlier in the week when the Department of Fiscal Services issued a report challenging some of the Linowes commission's predictions.

House Minority Leader Ellen R. Sauerbrey, R-Baltimore County, said during yesterday's hearing that important questions had been raised about how much money would be saved by taxpayers.

Sen. John A. Pica, D-Baltimore, who has proposed a somewhat less ambitious bill partly patterned after the Linowes recommendations, said he thought the assembly might have been more favorably disposed to the proposals if the economy were not "free-falling."

But the bill also has faced opposition from rank-and-file Assembly members who remember the anger of voters in the election of 1990.

If they did not remember, the protesters were on hand yesterday as memory aids.

.` Mr. Schaefer made his way into

the hearing room through a gantlet of jeering demonstrators, one of whom called him a "clown." Most of them wore lapel signs as big as license plates, saying, "No Linowes."

Proponents of the bill included Mr. Schaefer, witnesses from the religious and social service communities and a few Baltimore business leaders. But the audience was filled with lobbyists and corporate executives representing businesses opposed to proposed new taxes on machinery purchases or services -- and suggested they might have to move out of the state if such a bill passed.

Dry cleaners -- only one of the aggrieved groups speaking yesterday -- said the bill would impose new levies on their already hard-pressed industry. "We all know there isn't a money tree and our industry doesn't have a leaf to spare," said Richard F. Ehrenreich, a spokesman for the Mid-Atlantic Cleaners and Launderers Association.

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