A tax battle is brewing in Annapolis corridors

The Political Game

Revenue: Democrats appear to be stuck between a promise and budget reality.

February 12, 2002|By David Nitkin | David Nitkin,SUN STAFF

THE POLITICS of taxes is coursing beneath the surface of this year's month-old General Assembly session, ready to break through when budget negotiations reach their climax late next month.

In an election year, no party or politician wants to be perceived as a supporter of higher taxes. Even though a $1 billion gap exists between revenues and expenses in the 2003 fiscal budget proposed by Gov. Parris N. Glendening, there is no talk, at least among Democrats, of anything that smells like a tax increase this year.

But Republicans say the odor is pervasive in State House corridors. They say tax increases are in the works for this year and next.

Glendening's proposed budget would delay the final 2 percent portion of a 10 percent income tax cut that was to be phased in over five years. Republicans say "delay" is misleading. If Marylanders don't pay the lower taxes they were promised in 2002, that's the same as an increase, GOP leaders say.

The spin is working.

Just days before the legislative session began, Glendening briefed lawmakers on his budget, and told them of the proposed postponement. There were lots of nodding heads in the room in support of the idea, according to some of those present.

But the air of agreement quickly dissipated after politicians fully digested the proposal. Within a few days of the briefing, Senate President Thomas V. Mike Miller and other legislative leaders were saying promises made must be promises kept. The tax cut should stay, they said, even if it means cutting $177 million from programs.

So Democratic legislative leaders have backed themselves into a corner. They are on record as opposing a fiscal patch offered by their governor. And if they yield a little bit -- say, half the tax cut this year, and another half next year -- they are still open to the same charge from Republicans.

But that's not all.

House Speaker Casper R. Taylor Jr. wants to create a study commission to examine the state's budget and tax structure and recommend changes, according to the bill, "to ensure equity and efficiency" and to identify "new state and local revenue sources that may be considered in future years."

"Obviously, that means they are going to raise taxes or fees or a combination of the two," said House minority leader Alfred W. Redmer Jr., who is supporting an alternative to HB 1 that would look for efficiencies in the state budget.

If Redmer is right, Democrats are playing the politics exactly right. The study would be completed in December, with its recommendations ready for the 2003 legislative session.

That would be the first year of a four-year term of a new governor and General Assembly -- exactly the right time to raise taxes. By the time the 2006 elections arrive, politicians can hope that any residual ill feelings in voters' minds will have faded.

Townsend says she has all the competition she needs

It's no secret by now that Lt. Gov. Kathleen Kennedy Townsend would like to be elected governor with as little competition as possible. Her strategy: dissuade potential challengers from entering the race by raising as much money as possible while wrapping up key endorsements early.

That strategy was on full display this month when Townsend's chief fund-raiser, venture capitalist Michael G. Bronfein, sent an e-mail urging leading Democratic donors to eschew a fund-raising event by Baltimore Mayor Martin O'Malley. O'Malley doesn't have an election this year, Bronfein said, and saying no to the mayor is a way of showing support for Townsend.

But it appears the lieutenant governor is apparently concerned about challengers other than O'Malley and Republican Rep. Robert L. Ehrlich Jr.

On the same day Bronfein's e-mail began circulating widely, Townsend spoke to a group of college students, professors and administrators representing the Maryland Independent College and University Association.

"I hope politics is part of your future," she said. "I hope some of you will run for public office. But not for governor this year."

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