It's Over!

April 13, 1992

Finally, it's over. After an historic hesitation, the General Assembly belatedly balanced the state's budget with a broad tax package. It's about time.

The ultimate compromise, not surprisingly, was a combination of House and Senate proposals that had been around for a month. Yet legislators stubbornly refused to yield, forcing a first-ever extended session. You have to go back 139 years to find an Assembly gathering this long. That's a record legislators would just as soon forget.

What eventually emerged was a sensible balance of tax measures to close a $250 million budget gap. More than three times that amount was chopped from state programs and local aid to make Annapolis' income and spending match. But lawmakers shied away from Draconian steps that would have devastated those who depend on public help. Instead, they reluctantly agreed to raise taxes.

Changing the sales tax -- it will cover more services and contain fewer special-interest exemptions -- was a smart move. This makes the sales tax more equitable for all Marylanders.

Business groups unsuccessfully opposed a higher income tax on individuals earning more than $100,000 (and couples earning more than $150,000). It amounts to a "soak the rich" plan that will hit Montgomery County residents especially hard. Far preferable would have been a comprehensive restructuring of the income tax. Lawmakers should revisit this subject well before the new 6 percent tax bracket expires in 1995.

While an increase in the corporate tax might be advisable in better economic times, senators were right to block passage this year. Companies are having enough trouble making ends meet now.

Baltimore City and the 23 counties won the right to increase the "piggyback" portion of the income tax for their residents. That would make the maximum rate 9.6 percent for the wealthiest filers. But it is unlikely most localities will rush to adopt the higher rate: Anti-tax protesters are vocal in most counties. In the city, meanwhile, officials fear raising the piggyback levy would spur residential flight.

More encouraging was the vote to grant the poorest subdivisions "disparity" relief. This will provide extra help for Baltimore and for counties too impoverished to provide basic public services at an adequate level. It is the kind of statewide thinking we expect of the Assembly.

Legislators also acted wisely in hiking the gasoline tax by a nickel. This will provide statewide benefits in the form of highway, mass transit and airport improvements that are crucial to ensure economic growth and livability in Maryland.

Had senators and delegates completed their work on time, they would have earned a round of applause for this balanced and thoughtful political package. It attempts to help localities; it sharply cuts back the size of state government; it provides extra aid for the most needy jurisdictions, and it strives to restore Maryland's fiscal integrity. Too bad legislators took so long to get the job done.

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