Matthews Against Tax

November 27, 1991

ANNAPOLIS — Delegate Richard C. Matthews, R-Carroll, has declared his continuingopposition to a 1-cent state sales tax increase.

"The pressure ison to increase the state sales tax by one cent to help alleviate a budget deficit that keeps increasing every month," Matthews said. "That is just about the worst thing we can do. It will only delay the inevitable actions we must take to downsize government."

Noting that the extra penny would raise only $300 million, Matthews said the increase is "tantamount to putting a Band-Aid on a hemorrhage."

Since January 1991, the state has overcome a cumulative $1.3 billion deficit, but during the 1992 session, legislators will haveto overcome an additional deficit of another $1 billion or more, he said.

Even if the 1991 legislature had approved the entire Linowestax package, which would have raised $345 million for state coffers and $462 million for local governments, the state would still be facing huge deficits now and during the next two General Assembly sessions, Matthews said.

"Judging from my constituent letters and phone calls, I do not believe the majority of people realize just how bad things are now, how bad they're going to get before the economy shows significant positive gains," Matthews said.

"Rapidly falling revenue and wildly soaring expenditures in welfare and Medicaid attest to the facts that unemployment is high, people are earning less and even those whose incomes remain stable are spending less.

Matthews pointed out that last session was the first time in the history of the Maryland General Assemnly that it had to balance two huge budget deficits, $553 million for fiscal 1991 and $192 million for fiscal 1990.

Less than three months after the session adjourned, legislators werecalled back into a special session to balance a new $109 million deficit for the then-current fiscal year before it ended June 30.

Last month, drastic cuts were approved to balance a $450 million deficitin the current 1992 fiscal year budget. That deficit is expected to reach $150 million more before June 30,1992.

The state also faces a $700 million deficit for fiscal 1993, Matthews said. The upcoming 1992 General Assembly session will be confronted with those two budgetdeficits.

"We must look to privatization of government operationswhere feasible and encourage early retirement of state employees, somore jobs can be phased out," Matthews said. "All frills must be eliminated."

Citing what he considers a frill, Matthews said we can no longer afford to guarantee a free college education to every child of every employee of the University of Maryland system.

"We must come up with a hard and fast priority list for spending and we must stick to it," he said. "All and every conceivable cost-saving measure must be explored. We must do everything we can to keep the state operating budget in balance, as is required by our state constitution.

"But the one thing we must not do is raise taxes."

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