Business lobbyists unsure how they'll fare

HEROES OR GOATS?

March 30, 1992|By David Conn | David Conn,Annapolis Bureau

ANNAPOLIS -- With one week to go and counting, lobbyists for Maryland's business organizations still have little sense of whether they will report back to their members as heroes or goats after the General Assembly session.

To a large extent the major business groups see their fate tied to the budget and tax package, which still was being negotiated by two House-Senate conference committees through the weekend.

And decisions on the other major business topics, including health care reform, tort reform and real estate issues, have been delayed by the all-consuming budget and tax deliberations.

How has the session shaped up for the Maryland Chamber of Commerce? "It hasn't yet," said Donald Hutchinson, the group's president. "Clearly we're concerned about" the tax package.

"What we recognize is that the state is going to generate approximately $250 million of additional revenue," Mr. Hutchinson acknowledged. The only question in the chamber's mind: Who will pay those taxes?

The Senate's tax package doesn't change the current 7 percent corporate tax. But the House bill raises it to 7.5 percent for companies that earn up to $1 million, and to 8 percent for those with more than $1 million in profits.

Both versions expand the number of services subject to the sales tax, but the Senate version includes more taxable services. Those changes "are relatively painless," compared with the now-abandoned idea to raise the sales tax rate, he said.

But the chamber's main concern is that Maryland will move higher in the rankings of overall state taxation, and that national business magazines will spread the word that Maryland is an unfriendly state.

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The real estate industry was hoping that house buyers would be allowed to pay their taxes twice a year, instead of all at once. That would lower closing costs and might help more people buy a house.

A broad version of the bill died in the House Ways & Means Committee. But a narrower bill -- affecting only those who buy a house, rather than all homeowners -- has passed the Senate. It must survive the same House panel that killed the first bill.

A bill to require property sellers to provide a detailed disclosure form about the condition of their house, and therefore give some liability protection to real estate agents, has passed the Senate. It awaits a vote in the House.

The industry also hopes that the Real Estate Commission will be liberated from the state Department of Licensing and Regulation and made an independent agency.

But the bill to do that has been amended so that 20 percent of real estate agents' licensing fees would go toward a low-income housing fund. Realtors oppose that amendment, according to Edgar Hilley, executive vice president of the Maryland Association of Realtors.

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Things aren't quite so bad for retailers, according to Thomas Saquella, director of the Maryland Retail Merchants Association.

But he'll sleep better when he finds out whether the Senate will reject a House proposal to cut the sales tax rebate that retailers get for filing taxes on time.

Retailers were pleased to see the death of a plan to raise taxes on the sale of paint (to help finance a lead paint abatement and compensation program); upset about the success of a bill to favor manufacturers over retailers when calculating the corporate income tax; and thrilled that the sales tax rate was not raised to 6 percent.

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Almost every business in Maryland is holding its breath over the punitive damages bill, whose fate still rests in the Senate Judicial Proceedings Committee. A vote is expected this week.

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