Annapolis. -- Of course a hasty tax cut in a shaky economy would be ''fiscal folly,'' as your editorial (March 12) contends. But that does not mean that any tax cut is bad.
The premise for a tax cut is that the revenue stream of our existing tax structure asks too much from our citizens to pay for needed services. In 1991, our tax structure could not handle the expansion of services made necessary by the recession, so we asked more from our citizens through a personal tax increase that expired when the recession was over. Likewise, now that our revenue stream is creating a comfortable state surplus, it is responsible to examine the reasonableness of leaving more money in our citizens' pockets.
The leadership of the House of Delegates has been working to develop a personal-income tax-cut proposal that responds to the suggestions of Governor Glendening that income-tax cuts be based upon real budget cuts, with an eye on what federal cutbacks may do to our state. We agree that the state must develop a four-year program of shrinking state government. The governor proposes to begin in next year's budget, with the hope that such fiscal restraint will allow an income-tax cut in the later years of his term.
The House proposal sets out a five-year program with incentives for real government downsizing tied to cuts in the income tax. It is a way to cut taxes for Maryland's families -- without passing on the cost of these cuts to their children and grandchildren.
First, it sets a target of cutting income taxes by 6 percent. That will put $225 million back in the pockets of working families.
Second, it directs savings to parents struggling to raise children in our state by creating a family tax credit on the state tax return. That puts tax relief where our family values are.
Third, it creates a special ''Tax Reduction Savings Account'' in the state budget from which these tax cuts will be paid. This savings account would be filled from cuts in the state budget and future budget surpluses. Instead of putting these surpluses into more spending, we would earmark them for cutting taxes.
Fourth, because federal aid cuts are likely to drive up Maryland's projected budget costs over the next several years, we would put extra money in this savings account as a hedge against those federal cuts.
Finally, our proposal phases in the 6 percent tax cut, implementing each year's cut when the balance in the savings account is adequate to deal with federal cuts and to pay for that year's tax cut.
This approach provides tax relief for working families without creating future budget deficits. It takes into account the uncertainties of likely federal aid cuts, as well as the possibility of an economic downturn, and it creates incentives for the governor and the legislature to cut the budget.
Taxpayers have a right to both fiscal responsibility and tax relief. This approach provides both.
Del. Casper R. Taylor Jr. is speaker of the Maryland House of Delegates. Del. Sheila E. Hixson is chairman of the Ways and Means Committee. Del. James C. Rosapepe, vice chairman of the Ways and Means Committee, also contributed to this article.