Taxpayer amnesty considered

Md. lawmakers seek funds for health care

March 09, 2001|By Thomas W. Waldron and Sarah Koenig | Thomas W. Waldron and Sarah Koenig,SUN STAFF

Searching for a new revenue source to pay for soaring state health care costs, General Assembly leaders are backing a bill to give delinquent Maryland taxpayers a penalty-free amnesty period to make good on their overdue taxes, lawmakers said yesterday.

In a meeting with Gov. Parris N. Glendening, frustrated top lawmakers said they were determined to find money for health programs the governor failed to fund in his budget for next year.

For example, lawmakers are looking to cover a $41 million deficit in the state's mental health agency, a $16 million increase in salaries for workers who help the developmentally disabled, and as much as $20 million in prescription drug benefits for the elderly.

The closed-door meeting in the governor's mansion was held a day before the House Appropriations Committee is to begin cutting about $225 million from the governor's proposed $10.8 billion spending plan for next year.

Since the governor submitted his budget in January, lawmakers have complained bitterly about its size, which exceeds the legislature's self-imposed spending limits by $185 million and will force them to cut popular programs.

Hoping to tap some new revenue, legislators and the governor discussed the tax amnesty program, which would generate an estimated $70 million next year, according to the Assembly's budget analysts.

The amnesty bill would forgive delinquent taxpayers for a two-month period, meaning they would not risk fines if they paid up between Sept. 1 and Oct. 31 this year.

The last time Maryland offered an amnesty was 1987, when it collected more than $36 million in late or underreported taxes."[The amnesty bill], for certain, is going to pass," said Senate President Thomas V. Mike Miller.

Lawmakers said they were willing to bend their self-imposed spending limits and use a portion of the one-time tax-amnesty proceeds to address continuing programs in the health department - with the expectation that Congress will approve more spending in those areas in the next two years.

"It helps you temporarily," said Sen. Barbara A. Hoffman, a Baltimore Democrat who is chairwoman of the Senate Budget Committee. "You can at least do some of the worst-case spending."

Compounding the difficult task of making budget cuts, legislators have complained that Glendening failed to include enough money to take care of pressing state needs, particularly in the health department.

"By the end of the meeting with the governor, he had a good sense of the extent of our concern about these deficits," said Del. Nancy K. Kopp, a Montgomery County Democrat and chairwoman of an Appropriations subcommittee. "He said he'd work with us on the mental health deficit."

The state Mental Hygiene Administration is facing a financial crisis. With a budget deficit of $41 million, it could be forced to stop making payments to hospitals and other health providers by June.

The agency faces a backlog of claims from private mental health treatment centers. Because they haven't been paid, some centers have closed or gone bankrupt, and at least a dozen more risk similar fates.

In an analysis of the administration's budget, a legislative economist recommended the state contribute $10 million to help pay the debt. Glendening's budget offers $3 million.

During the meeting yesterday, Glendening urged legislators to develop a prioritized list of programs that should be included in the budget before the legislature adjourns in a month.

The legislature's budget committees are expected to make significant cuts in programs the governor showered with the largest spending increases. By cutting $225 million, legislators will meet their spending limit and free up an extra $40 million that the governor could "recycle" into lawmakers' favored programs.

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