Payoff from tax amnesty is so-so

$39 million is short of expectations

some programs will suffer Maryland's tax amnesty puts $39 million in coffers

November 28, 2001|By Robert Little | Robert Little,SUN STAFF

Delinquent taxpayers coughed up $39.2 million in previously unpaid taxes during Maryland's two-month amnesty period, the state comptroller said yesterday - more than once believed, but still far less than originally anticipated.

The General Assembly had hoped to collect $70 million when it approved the amnesty program earlier this year, and it had even earmarked the money for specific programs.

Because the funds came up short, $18 million intended for public education grants and volunteer fire companies won't be paid.

But Comptroller William Donald Schaefer, who had always thought the General Assembly's estimate was too high, considered the amnesty program a success.

An earlier count suggested the program would perform far worse, with only $13 million collected, but a late surge in payments caused that amount to triple.

"The $39 million paid is a little more than I expected to collect," Schaefer said in a statement.

A spokesman for Schaefer said 18,182 taxpayers took advantage of the tax amnesty offered in September and October, most of them individuals with delinquent income tax bills. By coming forward to pay back taxes and interest, they avoided penalties and were granted immunity from prosecution.

The largest single collection was $2 million, from a business that owed sales and use taxes. The largest personal income tax payment collected was $218,276.

The amnesty offer was touted by a $1 million advertising campaign that featured Schaefer, in dark sunglasses, saying, "The clock is ticking, so do it now." The comptroller's office spent another $1 million hiring more enforcement officers and buying upgraded computer equipment for tracking tax scofflaws.

Mike Golden, a spokesman for the comptroller's office, said that the recent economic malaise seemed to dampen enthusiasm for paying delinquent taxes.

"We're pleased with the results, but we think we could have collected more than we did if the timing had been different," Golden said.

After the comptroller's advertising and other costs are covered, $7.2 million will be distributed among Maryland's 23 counties and Baltimore City as their share of the income tax collected. Roughly $1 million will be paid to the state's transportation fund, and the rest will go into the state's general fund to cover expenses already committed.

Planned payments of $10 million for volunteer fire and rescue services and $8 million for public education grants will not be made. Legislators are contemplating alternative funding sources.

"I will have another proposal that I hope the General Assembly will consider next year," said Del. Norman Conway, a Wicomico County Democrat.

With the amnesty program finished, Golden said the comptroller's office plans to step up its pursuit of the state's remaining tax delinquents.

"We don't just sit back and hope the checks come in," he said. "We collect about $100 million in delinquent taxes every year, and with this new manpower and some new software we can be even more aggressive."

Yesterday was the first full day back at work for Schaefer, 80, after minor surgery to clear a blocked artery.

The Association Press contributed to this article.

Metro area tax amnesty collections

..................................................... Total .............................. Projected

.................................................... amount ............................. back to

Jurisdiction ................................ collected ......................... .. jurisdiction

Anne Arundel Co. .................... $3,084.639.95 ................... $753,256.85

Baltimore Co. .......................... $3,697,963.17 ................... $711,188.45

Baltimore ................................ $2,965,290.57 ................... $638,068.63

Carroll Co. ................................. $502,911.79 ................... $101,688.13

Harford Co. ............................... $828,024.63 ..................... $180,132.02

Howard Co. .............................. $1,673,508.75 .................... $365,902.66

SOURCE: Maryland Comptroller's Office

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