Senate enacts a variety of taxes Legislators pass $245 million plan, grumbling.

March 17, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- An unhappy state Senate did today what it tried to avoid all session: It voted to force virtually every Marylander to pay more in taxes.

The $245 million plan, approved on a relatively close 26-20 vote (24 votes are required for passage), now goes to the House of Delegates along with the Senate's pared-back version of Gov. William Donald Schaefer's $12.5 billion spending plan for fiscal 1993.

Although the tax plan likely will be changed by the House, the Senate version would expand the state sales tax to cover a variety of products and services not now taxed, such as pretzels, potato chips and prepared foods sold in grocery stores; repair services; dry cleaning; car phones; lawn care; and pay-per-view TV, among others.

It also would raise existing taxes on cigarettes; on wine, beer and liquor; and on long-distance calling.

At $245 million, it is far below the sweeping $700 million package Governor Schaefer proposed at the outset of the legislative session, and well below a $430 million plan the Senate Budget and Taxation Committee considered and ultimately killed by a single vote.

Typical of this entire legislative session, some senators said the approved tax plan went too far. Others said it did not go nearly far enough.

"I don't think we've cured the disease," said the dean of the Senate, 78-year-old Dorchester County Democrat Frederick C. Malkus Jr., of the state's lingering financial problems. "I think we'll be back because we haven't done the job correctly."

Senate Majority Leader Clarence W. Blount agreed, saying the Senate should have increased the sales tax and raised more money through the income tax to ensure that the state's neediest jurisdictions are cared for.

The Baltimore Democrat warned that if a House-Senate compromise on the budget and tax plan does not offer some financial relief for the city, he -- and perhaps other city legislators -- may vote against it.

For the city, he said, it is a matter of "survival or death."

But for those who believed that the tax package -- which would go into effect May 1 -- is insufficient, others felt it went too far.

"This is a bill that just lays another $245 million in taxes on the citizens of the state of Maryland. And they are taxes of the worst kind -- regressive taxes," said Republican Sen. F. Vernon Boozer of Baltimore County.

Those who voted against the tax package were mostly from Baltimore County, from rural parts of the state, and those who are members of the Senate's Republican minority.

Three of the Senate's nine Republicans, including Minority Leader John A. Cade, R-Anne Arundel, supported the tax package. Only one Baltimore County senator did, Democrat Janice Piccinini. Only one city senator voted against the tax package, Democrat Julian L. Lapides.

Sen. James C. Simpson, D-Charles, voted against the tax plan, saying it will merely take more money out of a recessionary economy dependent on consumer spending to spur a long-awaited recovery. "You can't expect it when you add $250 million more in taxes," he said.

After voting for the budget-balancing tax package, the Senate approved the budget itself on a 30-17 vote without debate, and approved a pair of companion budget-reconciliation bills designed to shift various state funds to cover deficits in the current fiscal year and fiscal 1993.

The budget, already lean after 18 months of declining revenues forced the governor and legislature to cut spending six times, reflects an unprecedented withdrawal of $253 million in state aid programs for Baltimore and the 23 counties. Those reductions affect programs created to help local governments pay for school bus transportation, police protection, Social Security and retirement benefits for teachers, librarians and others, and for parkland acquisition, transportation projects, and general uses to alleviate the need to raise local property tax rates.

The budget included sharp reductions in virtually all areas of spending by state agencies, and was balanced in part on increases in fees for a long list of government services.

House and Senate leaders intend to chase the budget and tax package with legislation to help the 24 jurisdictions offset reductions by raising the maximum piggyback income tax rate from 50 percent to 60 percent.

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