Senate passes unpopular tax plan $245 million compromise package seems to please no one.

March 18, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- The Senate has narrowly voted to raise taxes by $245 million in an action that fit the classic definition of a compromise: It made no one happy.

Senators who voted yesterday, and the delegates who will be on the tax hot seat next, complained the tax plan was too big, or too small, or taxed the wrong things.

The $245 million tax package was approved 26-20, just two votes more than the 24 required for passage.

It would expand the state's 5 percent sales tax to cover a variety of products and services not now taxed -- everything from snack foods to dry cleaning to massage parlors to pay-per-view TV. It also would raise taxes on cigarettes by a dime a pack and increase by 50 percent the current taxes on wine, beer and liquor.

The new taxes would go into effect May 1.

"I don't think we've cured the disease," Sen. Frederick C. Malkus Jr., the 78-year-old dean of the Senate, said of the state's financial problems.

"I think we'll be back because we haven't done the job correctly," the Dorchester Democrat added.

Republican F. Vernon Boozer of Baltimore County said the tax plan not only was too large, but also composed of "taxes of the worst kind -- regressive taxes."

The only point of agreement was that the final tax package the General Assembly will produce before adjournment April 6 will almost certainly be different from the one the Senate passed yesterday.

House Speaker R. Clayton Mitchell Jr., D-Kent, and Del. Tyras S. Athey, chairman of the tax-writing Ways and Means Committee, said they don't like the Senate's proposed tax increases on alcohol and cigarettes.

Mr. Athey, an Anne Arundel County liquor store owner, added that he doesn't even like the proposed tax on dry cleaning.

Mr. Athey predicted the House's final tax package may raise about the same amount of money as the Senate plan, but said he wants to do it "without a direct tax" that Maryland citizens will feel, such as the proposed taxes on dry cleaning, liquor or tobacco.

Mr. Mitchell's latest plan would tap into the $70 million the state pays each year in service charges to lottery agents, retailers, car and boat dealers, and utilities to compensate them for collecting and remitting taxes to the state.

Those who voted against the Senate tax package were mostly from Baltimore County, where anti-tax fever is hot, or conservatives from rural parts of the state where government is viewed as too big and costly.

Sen. Paula C. Hollinger, a Pikesville Democrat who traditionally has voted for government spending programs, not only voted against the tax package yesterday, but against the budget as well for the first time in her 14 years in Annapolis.

"I think there is an extremely strong anti-tax sentiment in the county," she said afterward. "It's dramatic: People have just lost faith in the workings of all government."

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