Business group to ask Glendening, Sauerbrey to cut Maryland's taxes

October 10, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

Maryland's biggest business group will call on the two gubernatorial candidates to cut the state's taxes to the national average and to pledge to make state regulations no stricter than national standards as the state Chamber of Commerce meets today in Ocean City.

The package of recommendations will be a follow-up to a report released last month that cited high taxes and relatively strict regulation as weak points of the state's business climate.

That report, done by University of Baltimore researchers on grants from major corporations in the state, listed strong universities, a highly educated work force and a central Mid-Atlantic location among the state's top business advantages.

"The taxes is kind of a no-brainer," said Champe C. McCulloch, president of Maryland Business Council Inc., the chamber's parent organization. "It has already been identified that Maryland has among the highest levels of income taxation in the nation. We have an even higher level of taxation on real estate transactions."

The University of Baltimore study said Maryland's personal income taxes are the fifth-highest in the United States, 61 percent above the national average. It also has the second-highest state and local real estate transfer and recordation taxes, though most counties' local transfer taxes are three times the state levy.

Maryland is below average on all other major taxes, according to the study.

Overall, Maryland has the nation's ninth-highest tax burden, according to the study. but its adjusted "tax effort" was only 3 percent above the national norm because so many states have similar overall tax burdens.

"The objective is to get down to the national average and move out of the top quartile in the next three fiscal years," Mr. McCulloch said. He said that would require about an 8 percent overall reduction in state tax revenue.

The chamber is especially interested in moving Maryland's tax burden closer to that of Virginia and North Carolina, which like most Southern states have lower-than-average taxes. Mr. McCulloch said the chamber sees those states and Pennsylvania as prime rivals for economic development and job growth.

"We're not supposing that the only way to compete with Virginia is to get to number 35," he said. "But to be in the top quartile while Virginia is in the third quartile shows you've got some road to travel."

Mr. McCulloch would not supply a copy of the recommendations in advance of today's meeting, but he said revisions in income, real estate transfer and personal property taxes would be among the proposals.

He would not say directly whether the group will propose specific spending cuts to keep the state's budget balanced after tax reductions.

The proposals are to be presented to gubernatorial candidates Parris N. Glendening, the Democratic county executive of Prince George's County, and Republican Del. Ellen R. Sauerbrey of Baltimore County, when they debate before the chamber today.

Mr. McCulloch said the group will propose a cap on real estate transfer taxes for people who are being transferred to Maryland. He said the group will also call for an income tax cut, but declined to say how much the chamber's plan will resemble Mrs. Sauerbrey's proposal to cut income tax rates by 24 percent over four years.

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