Senate conferees agree to cigarette tax No agreement on tax increase for wealthy. Extended session possible.

March 31, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- Senate conferees on tax legislation agreed today to go along with a House proposal to raise Maryland's tax on cigarettes by 20 cents a pack -- to 36 cents from the current 16 cents.

It was the only point of agreement in today's first meeting of the six conferees.

"We don't like it, but we'll go with it," said Sen. John A. Cade, R-Anne Arundel. The Senate had proposed a 10 cents-a-pack increase.

The House, which initially opposed any increase in the cigarette tax, approved the 20-cent hike only after Gov. William Donald Schaefer threatened to veto the entire budget balancing tax package if it did not contain an increase of at least that magnitude.

Mr. Schaefer, noting that Maryland's cancer rate ranks first in the nation, had proposed a quarter-a-pack increase.

The Senate conferees, however, said they could not go along with House plans for a new 6 percent income tax bracket to raise the taxes of the state's wealthiest taxpayers, or a proposed permanent increase in the corporate income tax rate. Surcharges that would lapse after one or two years might be acceptable, however, they said.

After the brief and cordial opening meeting, the conferees recessed to consider the opposite house's proposals.

Meanwhile, the General Assembly missed its deadline to enact the state budget yesterday, raising the possibility that this year's 90-day legislative session will have to be extended if lawmakers can't reach a compromise.

The Maryland Constitution requires the governor to issue a proclamation extending the session if the budget is not enacted by midnight of the 83rd day, which was last night. During an extended session, the General Assembly is prohibited from considering anything but the budget.

That could mean legislative death for any budget-balancing tax bill, the capital construction budget or other legislation pending when the regular session ends.

More ominously, it could mean that some version of the governor's "doomsday budget" -- a list of spending cuts so deep that certain state agencies would be crippled -- might go into effect.

Aides to Gov. William Donald Schaefer said he would issue the proclamation today extending the session for an additional 10 days beyond April 6, the last day. He issued a similar proclamation two years ago, although lawmakers enacted the budget in time for normal adjournment and it ultimately wasn't needed.

Sen. Laurence Levitan, D-Montgomery, chairman of the Budget and Taxation Committee, called the proclamation "merely a formality" and said Senate and House leaders hope they can reach compromises on budget and tax matters before the scheduled adjournment.

Only if they fail to enact the budget by then would the extended session begin. Even if that seemed likely, lawmakers could vote to extend the session themselves.

No legislative session has been extended because of failure to enact the state budget for at least 50 years and probably longer, according to legislative staff.

But the differences over the budget and more contentious tax issues make this session at least a candidate for breaking that record.

Conferees met for the third day yesterday, whittling down a list of some $70 million in differences between House and Senate budgets.

The agonizingly slow process involves the operating details of virtually every agency of government -- how much money is awarded in welfare benefits, how many prison inmates the state can expect next year, how much to cut spending on higher education without forcing tuitions sky-high.

The hottest issues, which usually involve the most money, almost always are saved for last.

Once the budget conferees finish their work, the legislature's most divisive problem -- what to do about taxes -- moves to center stage.

Budget deadlines

Midnight 83rd day (yesterday):

If budget isn't passed by this day, the governor is required to issue a proclamation to extend the 90-day session by 10 days.

Midnight 90th day (April 6):

Scheduled adjournment. If budget isn't passed by this day, the governor's proposed 10-day extended session begins and no other legislation may be considered but the budget.

Legislative options:

1. Enact the budget before midnight April 6, and no extended session is necessary.

2. Pass by a 60 percent vote of each house a resolution extending the legislative session. It would run concurrently with and continue past the governor's extended session. This could permit other legislation to be considered once the budget is enacted.

3. Enact the budget in an extended session and adjourn. Then reconvene in special session to consider tax, capital budget or other legislative matters that died when the regular session ended.

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