Pressure for state income tax cut Business groups lobby House lawmakers

March 07, 1996|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

The state's business community turned out in force yesterday in Annapolis to push for its No. 1 legislative priority -- a cut in Maryland's personal income tax.

Leaders of several business groups told the House Ways and Means Committee that such a cut is crucial for reinvigorating the state's economy and refurbishing Maryland's image in the corporate world.

"What we have here is a fundamental economic problem: Our economy is broke," said Robert R. Neall, lobbyist for the Maryland Chamber of Commerce. "It isn't going to get any better doing nothing."

The committee yesterday heard three proposals for tax cuts, including one sponsored by the panel's chairwoman, Del. Sheila E. Hixson of Montgomery County, and several other members of the House Democratic leadership.

That bill would cut personal income taxes by 10 percent, phased in over three years, eventually returning some $400 million annually to taxpayers.

Among those endorsing the bill were the Greater Baltimore Committee and the Greater Washington Board of Trade.

House Speaker Casper R. Taylor Jr. sent his top aide to support the concept of income tax relief. But Tom Lewis, the Allegany Democrat's aide, cautioned that the legisla- ture must also identify budget cuts to go along with a tax cut, or find an alternative revenue stream.

Tax-cut proponents say they can make no decision on the issue until updated revenue estimates are released by state fiscal experts next week. If those estimates are as bleak as many expect, tax relief for this year is considered dead.

An aide to Gov. Parris N. Glendening told the committee that the governor still wants to wait for those revenue estimates before deciding on a tax cut -- a position he has maintained since January.

"He doesn't want to be in a position of providing a modest tax decrease this year and having to come back down the road and ask for a tax increase," said T. Eloise Foster, deputy budget secretary.

Several social service advocates urged the committee to resist a tax cut, saying that the state's needs are simply too great to allow for one.

"I'm a little perplexed that people in this room are talking about a tax cut," said Lane Terwilliger, a lawyer from Sparks who volunteers at a Baltimore soup kitchen. "What I don't hear is any certainty as to where this money will come from."

Ron Dapkunas, a volunteer at a Baltimore homeless shelter, echoed the thought.

"I think everybody would like to enjoy more money in his pocket," he told the committee. "But with cuts in funding to different programs that affect low-income people, there will be even greater problems."

A representative of Baltimore Mayor Kurt L. Schmoke also spoke against an income tax cut.

Some legislators, meanwhile, are pushing for an increase in the state's sales tax -- possibly as a means of financing an income tax cut.

The committee yesterday heard a proposal to broaden the sales tax to apply to two dozen exempt items, including manufacturing equipment, photographic materials and gold bullion.

That bill, sponsored by Democratic Delegates James W. Campbell of Baltimore and Anne Healey of Prince George's County, would raise $105 million for the state next year.

Pub Date: 3/07/96

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