Rehrmann's tax-cut plan Property tax: Candidate for lTC governor's first proposal has virtues, but can't rely on surplus.

November 30, 1997

TAX CUTS ARE FAVORITE campaign vehicles for those seeking to move into governor's mansions. It worked in New Jersey four years ago and in Virginia this month. It nearly worked in Maryland the last time we chose a governor, too.

Harford County Executive Eileen M. Rehrmann has placed a new entry in the tax-cut parade -- terminating Maryland's $244 million state property tax. It marks Ms. Rehrmann's first offensive against Gov. Parris N. Glendening, her foe in next year's Democratic primary.

The Rehrmann plan should produce needed publicity and make her a more credible candidate for governor. Reducing the state property tax by an average $105 a year per homeowner would be a small boon for seniors and families on modest incomes (though it would not affect the local property tax). It also would aid property-owning companies and help make this a more business-friendly state.

Maryland is one of just nine states with a statewide property tax. It is the only heavily populated, industrialized state that does so. The property tax is viewed as regressive because it is not based on a person's ability to pay.

Yet totally wiping out this statute would not be prudent. The tax pays off the state's debt service on bonds. It is one reason Maryland has retained its triple-A bond rating.

Ms. Rehrmann wants to use surplus funds to make these bond payments instead. That is a bad idea. While there's a fat $311 million surplus expected next year, what would happen if the economy tumbles in 1999 and there's no surplus to subsidize Ms. Rehrmann's plan?

She says that as governor she would cut state programs to make up the difference. That's easier said than done. Voters deserve more specifics.

Ms. Rehrmann points out the governor can lower every homeowner's tax bill by 8 percent simply by putting enough money in his budget so the state doesn't have to turn to its property tax levy. The law would still be on the books as a backup in bad economic times.

It is an intriguing notion. With the state's economy looking considerably brighter, there indeed could be room for temporary tax relief next year. Lowering, though not eliminating, the state property tax might make sense -- as long as the surplus isn't tapped. Ms. Rehrmann should commit herself to using surplus funds only for one-time expenses.

The next move is up to Parris Glendening. Ms. Rehrmann has thrown a new tax-cut proposal at the governor's feet. He will be hard-pressed to ignore it.

Pub Date: 11/30/97

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