OPENING DAY at the Maryland General Assembly is reserved for pomp and ceremony, but also for some words of guidance from legislative leaders. Yesterday, House Speaker Casper R. Taylor sounded downright gubernatorial. In fact, Mr. Taylor -- who seems to be gearing up for a run for the mansion -- broached some subjects that present and past governors have long avoided.
Maryland, says Mr. Taylor, faces critical, interlocking fiscal problems. The state doesn't have enough revenue to take care of its unmet needs. Yet its income-tax burden is so heavy -- fourth highest in the nation -- it impedes economic development. And its sales tax -- sixth skimpiest -- is so narrowly applied it brings in little revenue compared with other states.
All this results in a chronic structural budget deficit, a low job-growth rate and a tax structure in need of an overhaul. The Cumberland Democrat's fear is that if these problems are not addressed soon, future generations of Marylanders will suffer.
His solution is sure to set off fireworks. He wants to broaden the state's sales tax so it applies to services as well as products. Simply extending the sales tax to telecommunications, computer software and repair services, Mr. Taylor claims, would generate enough revenue to cut both the income-tax and the sales tax to 4.5 percent from the current 5 percent.
Maryland then would have a far move efficient sales tax as a future revenue generator and a far more competitive income tax as a generator of economic development and jobs. The House Speaker's plan calls not only for lowering tax rates, but for responsibly providing the revenue to pay for those tax cuts.
Making this happen could prove difficult. Republicans love tax cuts, but not the idea of broadening the sales tax. Vested interests forced to pay the sales tax will mount a fierce challenge. And any tax bill passed by Mr. Taylor's House faces an uncertain future in Senate President Mike Miller's conservative chamber.
As for Gov. Parris N. Glendening's call for a 10-percent income tax cut, it appears dead on arrival -- a victim of the governor's failure to fully pay for this tax reduction and Mr. Taylor's gubernatorial ambitions.
Fiscal responsibility has been on the lips of Senate and House leaders in recent weeks. It could be a hallmark of this General Assembly session. They ought to take Mr. Taylor's proposals seriously. Tackling these knotty and controversial fiscal problems requires considerable political courage. But failure to act could lead to dire consequences in the 21st century.
Pub Date: 1/09/97
