House panel passes higher cigarette tax Threatened veto brings budget plan closer to approval

March 21, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- A threat by Gov. William Donald Schaefer to veto the General Assembly's budget-balancing tax package got immediate results late last night: A House committee voted to approve a 20- cents-a-pack boost in cigarette taxes that Mr. Schaefer demanded as a means of discouraging smoking.

The 15-8 vote by the Ways and Means Committee appeared to clear the way for committee passage todayof a broader, $252 million tax package put together by House leaders to balance next year's state budget.

In addition to the cigarette tax, that plan calls for adding a new 6 percent income tax bracket for those with taxable earnings of $100,000 or more, an increase in the corporate income tax rate, and a broadening of the 5 percent sales tax to include some products and services not currently taxed.

"I don't think it's a bluff," Ways and Means Chairman Tyras S. Athey said of the governor's veto threat.

Some committee members protested the sudden pressure from the governor. Del. Michael J. Sprague, a Democrat from tobacco-growing Charles County, complained, "It's interesting that all of a sudden the governor is the main medical authority of the state."

Mr. Schaefer's threat turned a confused day of deal-making into chaos as House leaders continued to piece together a compromise budget and tax package that can attract enough votes to pass.

Legislators pushing for local aid packages delayed action on the package, a move that brought an angry Speaker R. Clayton Mitchell Jr. to the Appropriations Committee. He warned members to "quit playing games . . . to cut out the shenanigans and cut out the B.S."

"All I'm telling you is that Rome is really burning now," he said. "If you don't get [the budget] to me now . . . [support for it] will gradually erode away."

Despite the speaker's pleas, the committee delayed final action on the budget until today, hoping to get assurances from the governor that a carefully orchestrated package of local aid programs for Montgomery and Prince George's counties and Baltimore City would be part of the final deal.

The Ways and Means Committee also delayed its vote on the overall tax bill until today.

The deal crafted to gain support for the budget and tax plans includes $24 million for the city and several poor counties; $8 million for "magnet schools" in Prince George's; $8 million for police protection, to be divided by Prince George's and Baltimore, and several education programs for Montgomery.

Also part of the deal would be passage of a nickel-a-gallon increase in the state's 18.5-cents-a-gallon gasoline tax, as well as a novel new titling tax on "gas guzzler" cars that would be used to subsidize mass transit costs for Montgomery and Prince George's counties.

The state constitution calls for the budget to be enacted by the 83rd day of the 90-day session, which is March 30 this year.

At a breakfast meeting with legislative leaders yesterday morning, lawmakers said Mr. Schaefer threatened to veto either the gas tax increase or another bill that would give local governments authority to raise more money in piggyback income taxes to offset huge cuts in state aid if he did not get his way on the cigarette tax.

The governor initially wanted a 25-cents-a-pack increase to the current 16-cent tax on cigarettes, as well as a new $20 million state campaign against cancer.

The Senate reduced the tax to a dime and eliminated all the anti-cancer money. The Ways and Means Committee, in a draft tax package circulated Thursday, did not include any new cigarette taxes.

Mr. Athey, a Democrat and liquor store owner from Anne Arundel County, has opposed higher taxes on alcohol or tobacco products. He argues that such taxes affect ordinary citizens more than other taxes the legislature could raise.

But Mr. Schaefer, who has kept his distance from legislative deliberations most of this session, responded with a full-blown news conference yesterday solely on the issue.

He said his proposal was designed to discourage young people from buying cigarettes and from getting hooked on smoking, and to reduce the cost to the state and to individuals of cancer, heart disease and other illnesses attributed to smoking.

To bolster his case, Mr. Schaefer invited an Anne Arundel County doctor to explain the health hazards of smoking, which he did with the aid of a plastic model of lungs and three containers containing pickled cross-sections of human lungs.

The human lungs were various shades of gray and black, said Dr. David Krimins.

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