Democrats wary about delaying tax cut

Tough decisions in an election year

March 15, 2002|By Howard Libit | Howard Libit,SUN STAFF

Maryland may be one of the most liberal states in the nation, but when it comes to tax cuts, many top Democrats are sounding an awful lot like Republicans.

From the moment Gov. Parris N. Glendening announced his intention to delay this year's 2 percent cut in the state's income tax, leaders of the Maryland General Assembly have refused to go along.

"It's a matter of keeping our word with the public," says Senate President Thomas V. Mike Miller, the Assembly Democrat most passionate about preserving the tax cut. "We made a commitment we would fully fund the tax cut, and we will do that."

On top of hundreds of millions of dollars in cuts to Glendening's $22 billion budget, that decision forces the Assembly's budget committees to find another $177 million or so in spending to eliminate.

Today, the Senate is scheduled to begin debate on such decisions as giving the University System of Maryland no increase in funding and cutting back proposed grants to arts groups. The House Appropriations Committee will decide on its own batch of cuts this weekend, with the two chambers scheduled to pass a budget by April 1.

To many elected officials and Maryland political observers, this staunch commitment to maintaining a tax cut equivalent to $75 for the average family of four comes down to one thing: 2002 is an election year.

Though taxes could be an issue in statewide races, Democratic leaders seem more concerned about the impact on Maryland's 188 legislative seats and keeping their party's overwhelming majorities in the Senate and House of Delegates.

A delay in the tax cut -- which took effect Jan. 1 -- isn't likely to hurt Democrats representing the liberal voters of Montgomery and Prince George's counties and Baltimore, legislators say.

But Democrats representing more moderate and conservative areas must be more sensitive to tax issues, particularly on the Eastern Shore and in Southern Maryland and portions of Anne Arundel and Howard counties.

"The Democratic Party cannot back away from that tax in an election year for fear of retaliation from voters," says Donald F. Norris, a policy sciences professor at the University of Maryland, Baltimore County.

A small but growing number of Assembly Democrats -- as well as a broad group of community advocates -- are questioning the leadership's decision, saying that part of what characterizes the party is its willingness to ensure the state has enough revenues to pay for programs it considers important.

"I don't see any point in trying to maximize the number of Democrats if when we come in here and vote, we can't tell the difference between the parties," says Del. Elizabeth Bobo, a Howard County Democrat.

Even one member of the Senate leadership -- Sen. Clarence W. Blount, a Baltimore Democrat and the Senate Majority leader -- says he would prefer a delay to the budget cuts under consideration.

Fiscal leaders insist they can find a way to cut taxes and preserve programs. In introducing the Senate Budget and Taxation Committee's spending plan to the full chamber this week, Sen. Barbara A. Hoffman, the Baltimore Democrat who is chairwoman of the committee, said the Assembly would "keep its promise to the taxpayers" and "at the same time pass a humane and sustainable budget."

Yet senators are seeking to eliminate a 2 percent cost-of-living raise for state employees -- instead giving one-time bonus payments, if money is available in January -- and community colleges are receiving smaller-than-expected increases, likely forcing large tuition increases. Glendening's environmental preservation programs are set for large cuts.

Maryland Democrats sought to seize the tax cut mantle from Republicans in 1997. Three years earlier, Republican Ellen R. Sauerbrey -- running on a message of cutting state spending and taxes -- came within 6,000 votes of defeating Glendening.

So a year before Glendening's rematch with Sauerbrey, the governor and Maryland's Democratic leaders embarked on a five-year, 10 percent cut in income taxes.

At the time, the economy was roaring and the state was flush with growing tax revenues. Glendening easily won re-election, and Democrats managed to turn back what had been a growing number of Republicans winning in the House and Senate.

Maryland's economic fortunes have soured, and Glendening -- seeking to preserve funding for his priorities in higher education and the environment -- introduced a budget in January that would delay the last stage of the tax cut until the revenue outlook improves.

Among the state's registered voters, delaying the cut seems to have support. In the Maryland Poll -- conducted in January for The Sun by Potomac Inc. -- 49 percent of voters favored delaying the tax cut to help with the budget shortfall and 43 percent opposed it.

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