Panel could recommend higher taxes

Fiscal task force seeking ways to pay for education, transport, other services

August 09, 2002|By Howard Libit | Howard Libit,SUN STAFF

The task force charged with figuring out how to pay for Maryland's future needs began work yesterday on a process that could result in recommendations for higher taxes.

The 17-member commission, created by the General Assembly this year, is to review the state's tax structure and other revenue sources with an eye toward identifying enough money to cover transportation, education and health care demands.

Potential solutions to be discussed likely will include increasing the sales or gasoline tax, expanding the sales tax to apply to additional services, and legalizing slot machines.

But under the timeline laid out by the commission yesterday, a serious examination of the tax structure won't begin until Nov. 7 - a schedule that puts off the most politically risky conversations until two days after the general election.

The most pressing need facing the commission is how to pay for the Thornton Commission plan adopted by the Assembly in April, which aims to increase the state's annual spending on public education by $1.3 billion within five years.

"We all knew the revenues were not going to be there after year one, and now we need to find the rest," said Del. Howard P. Rawlings, chairman of the House Appropriations Committee and a member of the commission. "We also have tremendous health needs. The speaker [of the House] has a proposal that would be $400 million."

The Commission on Maryland's Fiscal Structure includes many of the legislature's budget leaders, as well as fiscal experts from outside state government. Frederick W. Puddester, the former state budget secretary who is now budget chief at the Johns Hopkins University, was picked by Gov. Parris N. Glendening to be the task force chairman.

Puddester said the commission will aim to make recommendations for handling next year's fiscal woes by Dec. 15, then spend spring and summer looking at long-term solutions.

During yesterday's meeting, commission members reviewed the state's status, including the projection from legislative analysts that Maryland faces a deficit in the next fiscal year of more than $900 million.

They also heard a briefing on how Maryland compares with other states in terms of revenues and spending, learning that the state relies heavily on income taxes but relatively little on property taxes.

"While Maryland ranks high on personal income tax, which we all know, we're not a `tax hell,'" said commission member Laurence Levitan, a lobbyist and former chairman of the Senate Budget and Taxation Committee. "We're better than that."

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