Taxes at top of Assembly agenda

Legislature convenes to weigh tax increases in era of fiscal surplus

Gas, tobacco levies considered

Abortion, gay rights, sale of electric power also will be debated

January 10, 1999|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

The General Assembly returns to Annapolis Wednesday for its annual 90-day session to deal with the politically charged proposition that one or more Maryland taxes should be raised -- even as the state enjoys a huge budget surplus.

Gov. Parris N. Glendening and some legislators say the state needs two major tax increases -- one in the gasoline tax to pay for road and transit projects, and another in the levy on cigarettes to discourage teen smoking.

But while the Democrat-controlled Assembly debates tax increases, Republicans will push in the opposite direction. With the state enjoying such a robust surplus, they argue that Maryland should accelerate the 10 percent, five-year income tax cut passed in 1997.

"When times are good and we have surpluses is not the time to increase taxes and try to take a bigger percentage of people's income," said Del. Robert H. Kittleman, the House Republican leader. "Now is absolutely the wrong time to do it, and I don't care what kind of tax it is, whether it's cigarettes or anything else."

While tax issues are likely to generate the most attention, the session also will test the political courage of lawmakers with votes on such issues as abortion, collective bargaining rights for state employees, and civil rights for gays and lesbians.

"When you talk about things like abortion or gay rights, you are talking about issues that go far beyond politics and to everyone's core philosophical beliefs," said House Speaker Casper R. Taylor Jr. "Those kinds of issues are certainly more difficult."

Much will be at stake for the public in the coming 90 days.

The legislature will take up a proposal by Glendening to expand a state scholarship program for science and technology students to cover teaching majors as well.

Lawmakers will look for ways to make health maintenance organizations provide more services to consumers.

And the Assembly will consider electric utility deregulation -- legislation that could affect the way every Marylander pays for electricity.

But it is the tax issue that will have the most direct impact on state residents.

Gasoline and cigarettes

Glendening and legislative leaders support a boost of unspecified size in the state's 23.5-cents-a-gallon gasoline tax, which was last raised in 1992.

Confusing the issue, Taylor floated an alternative plan last week to raise the state's sales tax from 5 percent to 6 percent, with the proceeds dedicated to mass transit, freeing up other funds for road projects.

To round up the votes for a gasoline tax increase, Glendening and legislators will have to make the case to the public that important road and transit projects would be deferred for years without additional money.

"We have to do a little public relations," said Del. Thomas E. Dewberry, a Baltimore County Democrat.

Maryland's gasoline tax is about 2 cents per gallon lower than those in West Virginia and Pennsylvania, but 3 to 6 cents higher than taxes in Washington and Virginia.

The governor said he will also introduce legislation to increase the state's 36-cent tax on a pack of cigarettes by a dollar over the next two years.

Glendening has pushed unsuccessfully for an increase in Maryland's cigarette tax the past two years -- with the twin goals of generating state revenue and driving down the rate of teen smoking.

Conventional wisdom holds that votes on tax increases should come at the beginning of the four-year term, to give voters time to forget about them before the next election.

`Plenty' of money

But lawmakers find themselves in the uncomfortable position of considering two tax increases at a time when the state's financial position is so strong.

The state has more than $700 million set aside as a hedge against an economic downturn. Revenues for this year are exceeding projections by at least $200 million. And the state can look forward to receiving as much as $730 million from the recent national settlement with tobacco companies over the next five years, according to the Assembly's fiscal analysts.

" `Plenty' is the word which best captures the budget situation," the legislature's spending affordability committee commented in a recent report to the Assembly.

It is unclear if the political will can be found to pass either tax increase.

Del. John A. Hurson, the House majority leader, said polls show that the public would support increases in gasoline and cigarette taxes. But others are not prepared to support both.

"I will not vote for two tax increases," said Del. Howard P. Rawlings, the Democratic head of the House Appropriations Committee. "That's not why the voters of Baltimore City sent me down here."

Abortion issue returns

Abortion -- another issue that can win or lose votes for legislators in the next election -- will again be on the agenda.

Sen. Larry E. Haines, a Carroll County Republican, said he will introduce a bill to ban a late-term procedure that critics term "partial birth" abortion.

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