Sauerbrey vows to slash taxes 24% in 4 years CAMPAIGN 1994 - THE RACE FOR GOVERNOR

August 10, 1994|By John W. Frece | John W. Frece,Sun Staff Writer

Republican Ellen R. Sauerbrey, in a move certain to draw attention to her uphill bid to become the next governor, pledged yesterday to cut the personal income taxes Marylanders pay by 24 percent over the next four years.

Mrs. Sauerbrey, a 16-year state delegate from Baltimore County and minority leader of the House, said she would launch her bold plan as soon as she was elected, promising to cut taxes by at least 6 percent -- or by an estimated $205 million -- in her first year in office.

She said every Marylander's taxes would go down, and that taxes on families would go down the most.

The Sauerbrey camp estimated that after the full 24 percent cut was implemented in the fourth year of the program, a family of four earning $40,000 would save a minimum of $348 in state taxes a year.

But she offered few details about how her tax plan would work -- or how she would pay for it. And most of her opponents immediately trashed the idea.

Fellow Republican William S. Shepard of Potomac labeled it a "desperate" attempt by Mrs. Sauerbrey to raise her profile among voters.

Democrat Melvin A. Steinberg of Pikesville said it was "irresponsible" to propose tax cuts when the state already faces budget deficits of $300 million a year or more through the rest of this decade.

The two front-runners in the race, Democrat Parris N. Glendening of Prince George's County and Republican congresswoman )R Helen Delich Bentley of Baltimore County, simply refused to comment on the proposal. Mrs. Bentley even ignored specific allegations by Mrs. Sauerbrey that the size and cost of government would probably grow under a Bentley administration.

The Democratic and Republican primaries are Sept. 13. A public opinion poll conducted late last month gave Mrs. Bentley a 48 percent to 14 percent lead over Mrs. Sauerbrey for the GOP nomination. Mr. Shepard, the party's 1990 nominee, trailed the pack at 11 percent.

Mrs. Sauerbrey said she would offer more specifics about her tax proposal in coming weeks, but said it is impossible for a candidate to develop a complete plan without the budgetary advice available to a sitting governor.

She said, however, that for starters the $1,200 personal exemption could be raised to $1,450 in the first year and possibly higher after that. Such a change would be most beneficial to families, she said.

She also said the state's lowest tax bracket (2 percent on the first $1,000 of taxable income) could be abolished, and that capital gains that are reinvested in Maryland companies could be excluded from taxation.

Mrs. Sauerbrey was sketchy about how she would pay for such a tax cut, which she said by the fourth year would reduce revenues currently coming to the state by an estimated $820 million a year. But she anticipates that much of that loss would be made up increased economic activity. She said she would freeze state hiring, privatize certain government services, such as operation of a new prison being built in Western Maryland, and seek to eliminate unspecified waste and fat in government.

Central to the program, she said, is her conviction that tax relief will stimulate the economy and generate enough new revenue to cover the cost of the tax cuts and help government finance other essential functions as well.

"Tax relief must become the core, the philosophical center, of the budget process in Maryland," she said. "Spending decisions must be made around tax cuts, and not vice versa."

To most of her opponents, however, that theory had a familiar, Reaganesque ring to it.

"I get it," said a bemused Claire R. Hassett, press secretary to Democratic candidate and Montgomery County state Sen. Mary H. Boergers. "This is warmed over Reaganomics, supply side. It didn't work in the '80s. It's not going to work in the '90s."

Charles L. Benton Jr., budget secretary to Gov. William Donald Schaefer, said he sees no way such a tax cut can be implemented without eliminating entire government programs. "Any responsible or meaningful statement ought to be accompanied by more detail. You can't just say, 'Reduce taxes,' without saying how you're going to make up the revenues," he said.

William S. Ratchford II, chief budget adviser to the General Assembly, said the personal exemption change could cut taxes by about $45 million a year, and elimination of the 2 percent bracket would cut another $38 million. The effect of the change in the treatment of capital gains, he said, is harder to predict because it would depend on how it is targeted to Maryland

companies. But an estimate of $15 million would be in the ballpark, he said.

Mrs. Sauerbrey conceded that other changes would be needed to reach even her first year goal of a 6 percent reduction, but said the final plan is not finished.

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