County Banking On Passage Of Tax Increase Bill

Measure Would Give Carroll Authority To Raise Revenue

March 25, 1992|By Greg Tasker and Adam Sachs | Greg Tasker and Adam Sachs,Staff writers

The county commissioners never were so rattled during the budget process as they were yesterday when they received word that a $250 million general tax increase package had moved to the House floor for consideration -- and its possible demise.

Word came during the commissioners' review of the county attorney's proposed budget for fiscal 1993, which begins July 1.

"There is no joy in Mudville tonight," County Attorney Charles W.Thompson Jr. said.

The legislation includes a 5-cent gas tax increase that would raise about $122 million in fiscal 1993 and proposalsto give local governments, such as Carroll, new taxing authority to raise additional revenue.

County officials are banking on the Senate tax bill -- which, with House amendments -- would increase income taxes on the wealthiest Marylanders, raise the corporate income tax, repeal some sales tax exemptions and increase cigarette taxes by 20 cents per pack.

The tax increases and new taxing authorities could offset some potential cuts to local governments in the as-yet unresolved state budget and help them avoid a heavier reliance on county property taxes to maintain services.

"We are in a lot of trouble if it doesn't pass," Commissioner Elmer Lippy said.

State aid to Carroll would be reduced by about $7.6 million under a Senate-approved budget plan for fiscal 1993. County officials, who have been reviewing department budgets for weeks, have compensated for some of the expected loss in revenue, but not all.

The House Ways and Means Committee's amended plan, considered on the House floor last night, would reduce aid to Carroll by $8.9 million -- about the same as the Senate plan, except for a $1.24 million decrease in education aid. That would be the result of a $33 million reduction in APEX -- the formula providing education aid to local jurisdictions -- to be used as challenge grants to assist schools performing below standards.

"It's very frustrating and disappointing; the whole situation is sad," said CarrollBoard of Education Vice President Carolyn Scott. "Education is one of the most important things we need to put our money into, but obviously some people don't feel that way."

Under each chamber's plan, the county would lose $2 million in student transportation aid.

Also, under each plan, the county would lose $1 million in contributionsto the state Resident Trooper Program -- Carroll's main law enforcement division -- and another $314,000 in additional police aid.

A final budget plan likely will be hammered out by a Senate-House conference committee.

If the tax bill fails in the House, the county could lose additional money. The House Appropriations Committee outlineda plan for contingent budget reductions if the tax package is not passed. Losses could include a portion of the scheduled $6.3 million increase in state aid for the 22,500-student school system, money that has been earmarked to hire more teachers to offset Carroll's enrollment growth.

"It's scary," said Commissioner Julia W. Gouge.

If the schools don't get the $6.3 million, Scott said they will "certainly try to get the most we can from the county, although we understand their situation."

Even if the tax proposal passes, Commissioner President Donald Dell said the county still would be forced to make some cuts. The bill would enable counties to raise the piggyback tax from 50 percent to 60 percent, levy a tax on property transfers and charge a sales tax on energy and other fuels, utilities, telephone services, hotel and motel rooms, and cable television.

However, the commissioners said they don't support increasing the local "piggyback" income tax rates to raise additional revenues for Carroll. County budget analysts estimated the increase would generate about $6.5 million. An increased cap would mean that Carroll residents would pay to the county 60 percent of what they pay to the state.

"I'm definitely against it," said Lippy. "Increasing taxes would be the last resort here -- that's not to preclude that option, but I'm not for raising taxes."

Carroll legislators expressed similar views on taxes before yesterday's marathon session.

Republican Del. Donald B. Elliott saidhe doubted the wide range of taxes would be rescinded when the economy turns around.

"Then we'd spend more and expand bureaucracy," hesaid. "What we've got to do is do what you do at home, and that's tighten the belt."

Others taxes, such as the motel and hotel tax, would be more fair and would alleviate some of the burden on property owners, commissioners said. The county's legislative delegation rejected a proposal sought by the commissioners to give Carroll that authority.

But such a tax would raise only a small fraction compared to the income tax proposal.

Republican Del. Richard C. Matthews said if the commissioners gain new taxing authority, layoffs or other drastic measures would be unlikely. Rather, "they could spend like drunken sailors with so many fees and tax money," he said.

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