Social service lobby plea for taxes goes nowhere

September 17, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- That nasty T-word -- taxes -- popped up yesterday, and General Assembly leaders immediately batted it back down.

A coalition of 130 organizations representing teachers, unions, senior citizens, the poor and others suggested that the governor and legislature should at least consider raising taxes again to offset a new half-billion-dollar budget shortfall and save programs that otherwise may be cut.

The coalition, which for the past year has acted under the banner of Tax Equity for All Marylanders (TEAM), says the state should perhaps change its income tax laws to shift more of the burden to the wealthy, increase taxes on businesses and financial institutions, and expand the sales tax to currently untaxed services, especially those used most frequently by businesses or the well-to-do.

A spokeswoman for the coalition, Diana Vincent of the Maryland State Teachers Association, said raising more revenue would protect education, health care and other programs that are likely to be cut if the deficit is erased solely through reductions in spending.

Noting that some "optional" Medical Assistance programs could be eliminated, she said, "They are optional only to the state, not to the people who need them."

The coalition's plan would raise an estimated $488 million in new revenue, most of it -- about $350 million -- through a proposed expansion of the sales tax.

The immediate legislative response: Not a chance.

"There is absolutely no shot at revisiting [the tax issue] this year," said Sen. Laurence Levitan, a Montgomery Democrat, chairman of the Budget and Taxation Committee.

Incoming House Appropriations Committee chairman Howard P. Rawlings, a Baltimore Democrat, agreed.

And Gov. William Donald Schaefer said: "I am not going to propose any taxes, period."

In April, the General Assembly approved $256 million in higher taxes, plus a nickel-a-gallon increase in the gas tax. It also gave Baltimore and the 23 counties authority to raise local piggyback income tax rates.

But the notion of raising taxes proved so divisive that for the first time the 90-day legislative session had to be extended before that budget agreement was reached.

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