Senate sifts House tax package for common ground

March 26, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- Surprised by the unexpected scope of a half-billion-dollar tax package passed by the House of Delegates, Senate leaders yesterday began reviewing the massive proposal in search of compromise.

The two houses will have to agree on state spending and a tax package to finance it by Monday at midnight, a week before the 90-day session adjourns and the constitutional deadline for enactment of the budget.

"I don't think the tax package enacted by the House is acceptable to a majority of the Senate," said Sen. John A. Cade, R-Anne Arundel, an influential member of the Budget and Taxation Committee. "We have significant work to do to reach a compromise package."

The Senate has passed a smaller, $245 million tax proposal.

"Some issues [in the House plan], we haven't addressed. On others, we don't agree," said Sen. Barbara A. Hoffman, D-Baltimore, vice chairwoman of the budget committee.

One issue is a House proposal to add a 6 percent income tax bracket for taxable incomes of $100,000 or more. Some senators complained the change would further widen the gap between the state's richest and poorest subdivisions.

This is so because local jurisdictions, through piggyback income tax collections, share in the new revenue from statewide changes, and counties with wealthy residents would benefit the most from this one.

Translated into real politics, wealthy Montgomery County would be a winner while Baltimore and some of the poor rural counties would be relative losers.

The Senate also hasn't decided whether to raise the gas tax, which the House would increase by a nickel to 23.5-cents-a-gallon. And it hasn't decided whether to go along with the House in giving local governments authority to raise their maximum piggyback tax rate from 50 percent to 60 percent.

A pair of House-Senate conference committees will address these issues, one trying to work out differences on next year's state budget and the other working out differences on the tax plan required to balance that budget.

Meetings could begin as early as today and are expected to last into the weekend.

Meanwhile, members of the House wondered whether Speaker R. Clayton Mitchell Jr., D-Kent, would retaliate against any of the 11 members of the House leadership who voted against the tax-and-budget package that Mr. Mitchell and most of his lieutenants backed.

Mr. Mitchell suggested that some might lose their posts, saying, "It's unfair to ask for people to take a tough vote if leadership doesn't." But he declined to elaborate, and no personnel changes were announced yesterday.

Among those who voted against the tax bill was two-time Majority Leader John S. Arnick, a Dundalk Democrat who now chairs the Judiciary Committee, one of six standing committees in the House.

Others who strayed from the fold included subcommittee chairmen from both the Appropriations and Ways and Means committees, the chairman of a legislative oversight committee and deputy majority whips.

Mr. Arnick said yesterday that he did not know whether he would lose his chairmanship.

Some speculated that Mr. Arnick may be safe because he probably would have voted for the tax bill if the outcome depended on his vote, and because he and Mr. Mitchell have been legislative colleagues for two decades.

But others noted that Mr. Mitchell pointedly made the tax vote a test of leadership, and suggested he may have no alternative but to do what he threatened to do: punish the transgressors.

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