Tax plan is on hold House leaders turn to search for spending reductions

Speaker accepts delay

Glendening opposes proposed levies on telecommunications

February 28, 1997|By C. Fraser Smith and William F. Zorzi Jr. | C. Fraser Smith and William F. Zorzi Jr.,SUN STAFF

Only a day after unveiling a plan to give Marylanders a 10 percent income tax cut while raising a series of telecommunication levies, House leaders decided yesterday to delay further action on the proposal while they search for more ways to cut spending.

The reversal comes after Gov. Parris N. Glendening and some conservative Democrats joined Republicans to oppose some of the proposed new taxes.

Making no effort to conceal his unhappiness, the bill's principal architect, House Speaker Casper R. Taylor Jr., said he wants to give those who believe further budget cuts are possible a chance to defend their views, then to vote for those cuts.

"The governor who is trashing the House Democrats for not giving him a 10 percent tax cut is the same governor who wants to put a new $100 million [scholarship] program in place and the same governor who sent us a tax reduction package that creates an unmanageable deficit by the fourth year. You can't have it both ways," Taylor said.

He denied that he and the governor were now at war over the tax cut.

Glendening denied he was trashing Democrats.

"I'm trying to help them," he said. "I don't understand the policy or the politics" of the House proposal, Glendening said.

He particularly objects, he said, to the House leadership's decision to leave a doubling of the state's cigarette tax out of its plan, "substituting $60 million to $70 million in unacceptable telecommunications taxes."

The now-stalled House proposal would have taxed cable television service, direct broadcast satellite service, Internet service and telephone calling cards to offset some of the revenue that would be lost through the income tax cut.

Glendening wants to help pay for the tax cut partly by raising nearly $100 million through higher cigarette taxes. The governor defends his approach as a health care initiative that is popular with the public.

Republicans invited

To set up a round of on-the-record votes on budget cuts, the Democratically controlled House has issued an unprecedented invitation to the Republican caucus to present its arguments for deeper budget cuts at a formal hearing Wednesday.

To pay for a 10 percent cut in income taxes without raising other levies, about $427 million would have to be cut from the state's $7.5 billion general fund budget.

So far, GOP delegates have listed $153.9 million worth of reductions they would like to see, largely in housing and economic development programs.

As he was inviting Republicans to his hearing, Appropriations Committee Chairman Howard P. Rawlings asked Glendening to "generate public support for the programs the Republicans are proposing to eliminate."

Glendening called the hearing "a good idea" and a "very responsible way" to proceed. He said he looks forward to hearing Republicans defend cuts which he regards as ill advised.

Delay welcomed

Meanwhile, many delegates welcomed yesterday's action.

"You should try to do it through cuts in the budget," said Del. Donald C. Fry, a Harford County Democrat. "I don't like the concept of funding a tax cut by increasing other taxes."

A significant number of Democrats who expect strong Republican challenges in the 1998 election want to go home with a tax cut -- but they also want to avoid voting for any tax increase even if the net effect, as in the House plan unveiled Wednesday, is tax relief.

At the same time, tax cut opponents issued warnings from the other end of the political spectrum.

The Maryland legislative Black Caucus gathered to hear a report on the tax cut proposal from House leaders and to ask for assurances that social programs won't be sacrificed to pay for the reduction. And caucus leaders urged the group -- with 27 delegates and nine senators -- to stick together.

"They cannot pass this without African-American Democrats," said Sen. Larry Young, a Baltimore Democrat and head of the caucus.

Pub Date: 2/28/97

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