Tax panel vindicated, Schaefer says

August 05, 1992|By John W. Frece | John W. Frece,Staff Writer

PRINCETON, N.J. -- Gov. William Donald Schaefer called it vindication.

R. Robert Linowes, the Montgomery County lawyer who spent three years chairing a controversial Maryland tax panel, was one of five private citizens honored yesterday by the National Governors' Association.

Mr. Schaefer appointed Mr. Linowes to head the State Commission on Taxes and Tax Structure in 1987 and had to watch as the 1991 General Assembly shelved the commission's recommendations.

Mr. Schaefer said the recommendations were made "at a time when the right thing to do was not the popular thing to do."

Parts of the commission's report, which recommended a broad restructuring of Maryland's tax system and advocated a more equitable distribution of revenues, have subsequently been enacted piecemeal by the legislature.

It wasn't until early this year that tax increases were finally passed and then only because the state faced a huge deficit brought on by the recession.

Yesterday, Mr. Schaefer called the presentation of the award to Mr. Linowes "a vindication."

He nominated Mr. Linowes for the governors' annual Distinguished Service Award, presented at the conclusion of the 84th annual association meeting in Princeton, based on his lengthy work on the report.

"It's only problem was it was too visionary for the times," Mr. Schaefer said.

Mr. Linowes, 70, said he viewed the award as "a recognition of what a private citizen can contribute to trying to solve the problems of a state."

Mr. Linowes, who lives in Silver Spring and practices law in Washington, said he was the one who insisted on a tax study so thorough that it would take three years to complete. The governor initially wanted a report in six months.

When a suspicious legislature cut the commission's funding, Mr. Linowes and the Schaefer administration successfully turned to the private sector for financial support.

Mr. Linowes also said he was the one who insisted that the results of the study not be released until after the 1990 gubernatorial election. Mr. Schaefer was criticized for sitting on the report and failing to tell Maryland voters that he intended to raise taxes.

But Mr. Linowes said yesterday he did not want the report to become "a political football" in a campaign.

The only move Mr. Linowes said he has second-guessed is whether the commission should have "dropped the whole thing on the legislature at one time" or released its conclusions in phases. But in retrospect, he said releasing it all at once was the only option because otherwise the legislature would have used an incomplete report as an excuse for delay.

As it was, the report was virtually dead on arrival, immediately dispatched to summer study by lawmakers scared for their jobs by the no-new-taxes, anti-incumbent voters of 1990.

Mr. Linowes said he came away from the process believing there "too much posturing" by legislators, and too few who gave serious consideration to the commission's work.

After conducting its own study of the tax system, and facing an enormous revenue shortfall, the 1992 General Assembly enacted number of tax changes originally proposed by Mr. Linowes' commission:

* The income tax was modified to increase the rates on the wealthy.

* The sales tax was expanded to include certain previously untaxed services, and a variety of sales tax loopholes were closed.

* Cigarette taxes were increased.

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