State tax cut tops agenda General Assembly returns to Annapolis for 1997 session

Lawmakers are skeptical

Glendening offers both tax relief and costly programs

January 05, 1997|By Thomas W. Waldron and C. Fraser Smith | Thomas W. Waldron and C. Fraser Smith,SUN STAFF

The General Assembly returns to Annapolis on Wednesday to try to do something unusual -- cut taxes.

First enacted in 1937, Maryland's income tax has gone up but never down. Now, Gov. Parris N. Glendening has proposed slicing the rate from 5 percent to 4.5 percent over the next three years as a way of spurring the state's economy.

Many legislators would like to go along with a politically popular tax cut, but they fear the state can't afford to do it and also fund the expensive initiatives the governor has proposed.

"Parris is committed to so many spending things that it's hard to see how his balance sheet works out," said Del. D. Bruce Poole, a Democrat from Hagerstown. "He's probably going to put the legislature in a position of having to say 'No' to a lot of things that would be popular."

The fight over taxes -- along with brewing disputes over issues such as cleanup of industrial waste and the governor's proposed tobacco tax increase -- promises to make the legislature's 90-day session a contentious one.

For Glendening, it will be a critical time. After a series of missteps mostly related to the gambling issue and political fund raising, his statewide popularity sagged in the polls last year.

But his package, which includes the tax cut as well as free tuition for middle-class students and health care for uninsured .. women and children, puts him in a position to recover -- if he hasn't gone too far for the usually cautious Assembly to follow.

"It's a great opportunity for Parris to win back the confidence of a lot of citizens," said Del. James C. Rosapepe, a Prince George's Democrat. "He's putting a real priority on education, and that's the priority of most families. So he's really in sync."

Said Poole: "His agenda this year can be very important for him to establish an identity." Partly because last year's fight over state support for football stadiums obscured Glendening's other objectives, "some Marylanders still don't know who he is. This is an opportunity to make people stop and say, 'Oh, this guy's for middle-class people like me,' " Poole said.,

To make sure nobody misses that point, the governor will include an ambitious package of new programs and tax changes in the $15 billion budget he submits to the Assembly later this month.

Topping the list is the tax cut, which would mean an annual savings of about $167 to a Maryland family of four earning $50,000.

On the spending side, about 5,200 pregnant women and young children would receive state-funded health insurance, and the state would commit $170 million over five years to preserve open space and to slow suburban sprawl.

In the classroom, Glendening wants to spend more on public school programs for gifted and talented children and to provide college scholarships for B-average students from families earning up to $60,000.

In addition, the governor will propose a 10 percent pay raise for Maryland State Police to help retain veteran officers.

Lumped together, the initiatives would fit with his goal of making Maryland "the best state in the country for families," Glendening said.

Legislators are skeptical.

Once fully enacted, the governor's tax proposal would cost the state about $450 million in lost revenue annually, a significant portion of the state government's general fund, which next year will total about $7.7 billion.

"The programs he's putting on the table are only ones that are politically popular. That's the good news," said Senate President Thomas V. Mike Miller, a Prince George's Democrat. "The bad news is, the money is not there to fund them."

Miller's counterpart in the House of Delegates, Speaker Casper R. Taylor Jr., expressed similar concerns. Responsible income-tax relief, said Taylor, an Allegany County Democrat, must be coupled with an expansion of the state's relatively low sales tax to apply to as-yet unspecified services.

Forced on the defensive during the tax debate will be advocates for the poor, who fear that a major tax cut would spell trouble for existing poverty programs. If lawmakers cut taxes too much, "then I think we're digging a very, very deep hole for everybody who lives in Maryland," said Lynda Meade, a lobbyist on welfare issues for Associated Catholic Charities.

Even before the session begins, legislative leaders have made it clear they will not approve a key part of the governor's agenda: doubling the state's 36-cents-per-pack cigarette tax.

Instead, lawmakers seem willing to approve a much smaller increase, with the money being earmarked for initiatives designed to discourage tobacco and drug use. "If it passes, it would be a very small amount compared to what the governor is seeking," said Miller.

Lawmakers have also raised strong concerns about Glendening's proposal for a five-year, $254 million increase in aid for the Baltimore school system.

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