House agrees to $500 million tax increase Budget also passes

both bills require Senate reconciling

March 25, 1992|By John W. Frece and Marina Sarris | John W. Frece and Marina Sarris,Annapolis Bureau C. Fraser Smith of the metropolitan staff contributed to this article.

ANNAPOLIS -- Get ready for a tax increase. The only question is which taxes and how much.

Under a proposal approved 78-61 by the House of Delegates last night, you would have to pay more taxes every time you buy gasoline, fuel-guzzling cars, cigarettes, pretzels, potato chips or cafeteria food, or when you use your car phone or decide to wear a beeper on your belt.

If you're wealthy, you would pay higher income taxes; if you're a business, you would pay more whether you make money or not.

Local officials, who have been forced to absorb a quarter-billion-dollar reduction in state aid, would have the power to raise their local share of income taxes from a maximum 50 percent to 60 percent of the state tax, as well as the authority to increase a long list of other local taxes.

All told, the plan would raise about a half-billion dollars in new taxes to help the state balance a $12.5 billion budget. It would also allow counties and Baltimore City to raise nearly that much again, on their own, to offset cuts in state aid.

While the entire plan may not become law, the Maryland Senate has passed its own version of the budget and tax bills, and when the two houses reconcile their differences, taxes will be higher.

Although they acknowledged worries about retribution from constituents who are said to feel taxed to the point of rebellion, House proponents of the measure said they were satisfied the bill is sound and politically defensible.

Good schools, good transportation and adequate correctional systems "don't come without a price," said Majority Leader D. Bruce Poole, D-Washington, who spent several days corralling the votes to pass the package.

Marylanders, he said, understand the necessity of yesterday's vote. He said he thinks the political threat to those who voted for the tax bill is overstated.

"Voodoo economics is coming to an end. People understand it's a farce," he said, leveling a shot at the Republican opposition and recalling President Bush's 1980 description of former President Ronald Reagan's economic policies.

"The voters may be fooled for a while," Mr. Poole said, "but they're not dumb."

Speaking for the Republican opposition, Del. Martha S. Klima, R-Baltimore County, said yesterday's vote showed "a clear difference between those who think we need to provide more services [the Democrats] and those [the Republicans] who want to pull back and re-evaluate what we're doing."

The Senate has passed its own $245 million tax plan, but has not yet voted on either the gas-tax or local-piggyback-tax issues. Some form of tax increase is virtually guaranteed since both houses have passed budget-balancing tax bills.

Republicans led the opposition in the House, but they were joined by Democrats from suburban Anne Arundel and Baltimore counties as well as from Southern Maryland. They were outvoted by a coalition organized by the city of Baltimore and Montgomery and Prince George's counties.

Before the vote on taxes, Democratic leaders rebuffed the GOP attack on the budget and pushed the $12.5 billion spending plan to approval, 86-46.

"This is the largest tax package that has ever passed in the state of Maryland," claimed House Minority Leader Ellen Sauerbrey, R-Baltimore County.

Citizens of all income levels don't want a tax increase, she argued, and Democratic attempts to tax the rich are misguided.

"We're not here to be Robin Hood and take from the rich and give to the poor. . . . The bottom line is, we did not get sent down here to raise taxes," she said.

Del. Timothy F. Maloney, D-Prince George's, charged that Republicans were never serious about cutting the budget enough to close a $250 million gap between revenues and expenditures.

"Where are your cuts in this budget? They do not exist," he exclaimed.

He accused GOP lawmakers of being blind to the state's fiscal problems, in some cases fighting against minor tax increases that would help the most needy.

"There are those who say we should continue the [sales tax] exemption on dietary pet food even if it hurts nutrition programs for women, infants and children," he said.

He and other Democratic fiscal leaders also defended their proposal to allow local jurisdictions to raise the local piggyback income taxes.

Republican and Democratic county executives supported the move, they noted. They said they wanted to allow counties and Baltimore to raise local income taxes so they wouldn't have to impose drastic increases in their property taxes, which many people believe to be unfair taxes.

Baltimore would have had to raise its rate by 33 cents per $100 of assessed value to make up for lost revenues, they said. Baltimore County would face a 39-cent increase.

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