Assembly faces tough fiscal choices

Governor's budget presents dilemma in election year

Possible delay in tax cut

Lawmakers seek additional funds for education

January 13, 2002|By David Nitkin | David Nitkin,SUN STAFF

As Gov. Parris N. Glendening prepares to unveil his eighth and final state budget, lawmakers are steeling themselves for the grim chore of deep program cuts to fulfill commitments they believe voters want them to keep.

Glendening will release details of the more than $20 billion spending plan Tuesday, but word of some elements has filtered out.

The governor's budget proposal will call for a delay in the last installment of a 10 percent state income tax cut, those familiar with the plan say, and will not include the major additional public school spending that a blue-ribbon panel recommended.

His decisions won't sit well with many members of the General Assembly.

In an election year, lawmakers are loath to reverse the last 2 percent portion of the tax cut, even though that would free up at least $150 million in revenue.

And several leading legislators say they want to spend $100 million or more as a first installment on a recommendation by the Thornton Commission, which has proposed $1.1 billion more in annual school spending for Maryland to meet its constitutional commitment to equitable education.

"We're looking at $300 million-plus in cuts" to the governor's plan, said state Sen. Barbara A. Hoffman, chairwoman of the Budget and Taxation Committee.

Added Baltimore Del. Maggie L. McIntosh, the House majority leader, "I think the budget is going to be really, really tough."

A day after he releases his spending proposal, Glendening will deliver his final State of the State Address. He teased lawmakers a few days ago, telling them he will orate for his full 90-minute allotment Wednesday, when he is expected to recap what he considers to be his administration's accomplishments.

As a lame-duck chief executive presiding over a slumping economy, Glendening will face a very different legislative chamber than he did 12 months ago. Last year, Glendening was able to push an ambitious agenda through the Assembly by wielding the threat of legislative redistricting and by disbursing hundreds of millions in surplus tax revenue.

Now the governor's redistricting map is done. Winners are relieved and losers are tending their wounds. Surplus revenue is gone; state officials predicted last month that Maryland will collect $520 million less in tax revenue for the 2003 budget year than first thought.

But the governor isn't worried about a loss of influence, said his spokesman, Mike Morrill.

"Always during a legislative session, we have leverage," he said.

Morrill conceded that lawmakers could find little to like when they see the spending proposal.

"It will not be a budget that makes people happy," he said. "There's no room for growth in any significant area."

But Morrill repeated his assertion that Maryland is in better shape than many other states. The state will close the current fiscal year June 30 with a surplus, he said, and the budget for 2003, which begins July 1, will maintain investments in education and the environment.

Much of the legislature's debate in coming weeks will center on the income tax cut. The General Assembly would have to approve legislation to delay the final 2 percent cut - about $75 for a family of four.

"I don't think you'll get [the necessary] 24 votes in the Maryland Senate to delay the tax cut," said Senate President Thomas V. Mike Miller of Prince George's County.

Partisan rhetoric is already heating up over how the delay will be received.

"They can say what they want, but that's a tax increase," said Del. James F. Ports Jr., the House minority whip from Perry Hall. "We made a promise five years ago and we have to keep it."

Kenneth R. Timmerman, president of the Maryland Taxpayers Association, said his group would "vigorously oppose" a postponement.

McIntosh, the House majority leader, said members of her chamber also prefer to keep their commitment to voters. About the only palatable excuse for a delay, she said, is if the money is targeted for education.

"It just can't be to backfill," McIntosh said. "It has to be a really legitimate reason."

While preserving the tax cut might avoid potential political problems for lawmakers, results from a poll recently conducted for The Sun show that by a narrow margin, voters say they would accept a delay in the tax cut to help balance the state's budget.

Forty-nine percent of voters would support a postponement, while 43 percent say the cut should take effect as planned, according to the Maryland Poll.

In a further budget complication, lawmakers also will begin grappling with how to pay for the Thornton Commission's finding that Maryland schools need at least $1.1 billion yearly in additional revenue.

Miller, the Senate president, said last week that he wants to earmark at least some money to fill the need. "If not a footprint or a handprint, at least a thumbprint," he said, not mentioning a specific figure.

House Speaker Casper R. Taylor Jr. is taking a longer view: Among his top priorities this year is the creation of a group to study changes in Maryland's tax structure to generate more money for education, transportation and other needs.

By a margin of 52 percent to 42 percent, Maryland Poll respondents said they would be willing to pay higher taxes to pay for better schools, but the probability of a tax increase in an election year is virtually nil.

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