Lawmakers walk out on tax talks House, Senate drop negotiations. Long session likely.

April 02, 1992|By John W. Frece | John W. Frece,Staff Writer

ANNAPOLIS -- House and Senate tax negotiations collapsed today, just when it appeared the General Assembly was about to work out its differences.

The sudden reversal again raised the possibility that the state's 1993 budget may not be adopted by Monday's midnight adjournment deadline, which would force the 90-day session to be extended until it is.

At the urging of Gov. William Donald Schaefer, tax conferees met last night and seemed on the verge of reaching a compromise. But when they reconvened this morning, talks quickly broke off.

Sen. Laurence Levitan, the Montgomery County Democrat who chairs the Budget and Taxation Committee, told the House conferees that if they wouldn't consider making a proposed increase in the income tax for wealthy Marylanders temporary, there was no reason to continue talking.

The delegates said there was no reason to continue talking, and left.

Afterward, Mr. Levitan said the Senate would regroup later today and pass a three-bill substitute budget and tax plan that senators hope will "get us out of this mess" before adjournment.

He said the plan would include:

* About $200 million in tax increases to balance the fiscal year 1993 budget. Those tax increases would include a 20-cents-a-pack boost in the 16-cents-a-pack cigarette tax, the closure of a variety of sales tax loopholes, some new tax enforcement and compliance measures, and expansion of the sales tax base to cover previously untaxed home and residential security services.

Mr. Levitan maintained that tax package was as "non-controversial" as possible, noting it no longer includes a proposed tax on dry cleaning or other services many Marylanders use.

* A nickel-a-gallon increase in the state's 18.5-cents-a-gallon gasoline tax to get the state's stalled transportation program moving. The revised Senate plan, however, would not include a controversial titling tax increase on "gas guzzler" cars that was part of the House proposal.

* A "perks package" that would send a $30 million grant to Baltimore and five poor counties, would restore $17 million for educational placements for disabled students, and would add a sixth penny to the gasoline tax increase that would finance state assumption of mass transit operating costs now borne by Prince George's and Montgomery counties.

The bill also would permit the 24 major jurisdictions to raise their maximum piggyback income tax rate from 50 to 60 percent to offset $250 million in reductions in state aid, but would not expand any other local taxing authority as proposed by the House.

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