Maryland may raise two taxes Legislators consider higher fees on gas and cigarettes

November 27, 1998|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF Sun staff writer JoAnna Daemmrich contributed to this article.

Maryland has a budget surplus of more than $400 million, a lucrative settlement with the tobacco industry and a healthy reserve tucked away for the future, so it would seem the talk in Annapolis would be about returning some of that money to taxpayers.

Quite the opposite. Gov. Parris N. Glendening and the General Assembly are expected to consider two tax increases -- not cuts -- when lawmakers reconvene in Annapolis in January.

A boost of as much as $1.50 on the state's 36-cent-per-pack tax on cigarettes has won Glendening's support and will come up for serious debate during the next legislative session. And key legislative leaders are backing an increase in the state tax on gasoline next year, a move that Glendening has signaled he might support as well.

Talk of tax cuts has all but ceased.

After deciding last year to reduce the state income tax by 10 percent over five years, the governor and key lawmakers say tax reductions would not be prudent. The recent election results, in which Republicans touting tax cuts fared poorly in Maryland, show that the issue is not a burning one, key Democrats say.

"I think the public wants good government, responsive government, and a government that cares and services their needs," said Del. Howard P. Rawlings, Democratic chairman of the House Appropriations Committee. "Some of the talk [of tax cuts] sort of waned after the election."

The only serious move toward tax relief is Glendening's campaign suggestion that the state accelerate the 10 percent cut and implement it in two years instead of the originally planned five. The governor has made no final decision on the feasibility of such a move, a spokesman said.

"There's a lot to look at to see if we can do the entire amount next year," said Ray Feldmann, Glendening's press secretary.

Democratic lawmakers are mainly focusing on the two pending tax-increase proposals.

Glendening tried unsuccessfully two years ago to pass a higher cigarette tax. Some Democrats will push the issue again next year and hope for a groundswell of public support.

Republican leaders said a higher tobacco tax will be difficult to sell while the state has a large budget surplus.

One key Democrat, Senate President Thomas V. Mike Miller, also has said he opposes an increase. House Speaker Casper R. Taylor, another Democrat and an ex-smoker, favors increasing the tax nationally, not in Maryland alone.

"I'm absolutely convinced that tobacco has already shortened my life," said Taylor, who underwent a quadruple heart bypass four years ago. "I hate cigarettes."

He added: "For those of us who are convinced that a massive tax will cause a substantial number of young people to avoid smoking, we should support it on the national level. To impose a massive level of cigarette taxation in one state, making us an island, I think defeats the very purpose that the proponents are trying to accomplish."

Based on pledges collected during the election and past voting records, proponents of a cigarette tax increase said at least 23 senators and 68 delegates support the increase -- not a majority in either chamber of the legislature, but within a handful of votes in each.

Supporters hope Glendening will give the issue momentum by introducing the legislation himself in the next session -- a decision the governor's aides say has not been made.

Advocates said it's crucial to remind the public that the tax's main purpose is to discourage teens from smoking.

The governor said he believes raising the tax would price cash-poor teens out of the addictive habit. He added that he was concerned by a recent survey that shows a significant increase in smoking among college-age youths.

"As the cost per pack goes up, smoking by children goes down," Glendening said.

Del. Robert H. Kittleman, the House minority leader, said he sees no need to raise the tax at a time of soaring state revenues. He pointed out that the tobacco industry has signaled its intention to raise cigarette prices because of its recent settlement with 46 states -- a deal that will bring Maryland an estimated $4.2 billion in revenue over the next 25 years.

On the gasoline tax, legislative leaders had urged Glendening to support an increase early in his first term, a move the governor resisted.

While the state does have a large budget surplus in its general fund, the state's transportation trust fund -- largely built on gasoline tax revenue -- is showing signs of trouble, analysts say.

Without an increase in the state's 23.5-cent-a-gallon tax on gasoline. The last increase was in 1992. Maryland will not be able to maintain its ambitious road building and mass transit programs, some lawmakers said.

But no legislative consensus exists on when to attempt a gasoline tax increase -- a move guaranteed to provoke public outrage.

Lawmakers said it would make political sense to raise the tax next year, at the beginning of the four-year term and well before the next statewide election in 2002.

Pub Date: 11/27/98

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