Legislators say they will honor tax cut

Assembly leaders reject Glendening's plan to delay break

`Something that we can do'

Action would lead to $177 million trim to balance budget

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

General Assembly leaders pledged yesterday that Marylanders will see a 2 percent cut in their income taxes this year, rejecting a proposal from Gov. Parris N. Glendening to postpone the break during a time of slumping revenues.

"It's something that we can do and should do," Senate President Thomas V. Mike Miller said. "We want to demonstrate to the public that this is not a tax-and-spend state."

House Speaker Casper R. Taylor Jr. said the resolve of his chamber is even stronger.

"When you are trying to build the public's confidence in government and defeat overall cynicism and apathy, you've got to deliver on your commitment," Taylor said. "We have the resources to deliver this tax cut."

Glendening called for a delay in the final stage of a five-year, 10 percent income tax cut passed in 1997 when he unveiled his proposed $22.2 billion budget last month. The postponement would cost a Maryland family of four earning $53,000 about $75 this year.

The governor wants to use the $177 million savings to balance the budget for fiscal 2003, which begins July 1. For the cut to remain, lawmakers must trim $177 million from Glendening's spending plan.

Leading legislators said yesterday they can accomplish the task, but did not offer specifics.

General Assembly members are under far more pressure than Glendening to fulfill the tax-cut pledge. The governor cannot seek a third term, but many delegates and senators will ask voters in November to return them to Annapolis for four more years.

Republicans have taken to calling the governor's plan a "tax increase" because the final 2 percent reduction took effect Jan. 1 and would have to be reversed by a separate law.

"In an election year, we as legislators are going to be held accountable for the decisions we make," said Del. Alfred W. Redmer Jr. of Perry Hall, the House minority leader.

During a meeting of the Senate Democratic caucus, Miller implored his colleagues to stay focused on the commitment. As the 90-day legislative session reaches its midpoint, he said, lawmakers are faced with increasing pressure from county officials and others who want money for projects.

Lawmakers must begin to say no, Miller said.

"Some folks who had been on board were beginning to waver, but they're back on board," said Sen. Barbara A. Hoffman, chairwoman of the Budget and Taxation Committee.

Glendening told legislative leaders last week that he would work with them on identifying cuts, but warned that chore would be difficult, said Mike Morrill, the governor's spokesman. "We can't do it with gimmicks," Morrill said. "We can't borrow our way out of this because all we are doing is shifting the burden to the future."

Legislators have yet to identify where they would cut spending, although some observers have speculated that higher education and land preservation programs could suffer.

"When you don't have the money, you can't spend it," said Del. Howard P. Rawlings, the Baltimore Democrat who chairs the House Appropriations Committee. "Except for public education K-12, which we have a constitutional responsibility for, everything is open to budget cuts."

Speaker Taylor offered another proposal yesterday: further tapping the state's reserves.

Glendening has proposed spending about $800 million in surplus funds next year, while leaving roughly $500 million in a "rainy day" account - an amount equal to 5 percent of the general fund portion of the budget. The governor says the balance is needed to preserve Maryland's coveted AAA bond rating, but Taylor said the rainy day fund could be mined even further.

"There's nothing unusual about using that rainy day fund. And there's nothing unusual about going below 5 percent, if it's being done to properly balance the budget and your strategy and program are in place to rebuild the fund," Taylor said.

But Rawlings said he opposes the idea, in part because the collapse of Enron and fear of other corporate disasters could weaken a faltering economy.

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