Business hopes legislature is understanding

It realizes lawmakers have little time left to close budget gap

No one wants higher taxes

March 21, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

Maryland lawmakers have roughly three weeks to figure out how to pay for programs and services and make up for a projected shortfall in revenue -- creating concern for business people who fear they will pay bigger bills as a result.

Representatives of the business community say they believe Maryland has made strides in creating a more friendly corporate environment under Gov. Robert L. Ehrlich, the state's first Republican governor since 1969. Recent studies of the business tax burden relative to other states support that view. But many are waiting to see how state leaders act to close the estimated $800 million budget gap and fund priorities in the next fiscal year which begins July 1.

Business leaders say they have little concrete in the way of wins or losses from the General Assembly so far this session, which ends April 12, but the most sweeping measures often aren't decided until the final days.

Kathleen T. Snyder, president and chief executive of the Maryland Chamber of Commerce, warned a group of business people and lobbyists during a meeting with lawmakers last week not to become overly secure just because the governor has publicly opposed sales, income and gas tax increases.

"We cannot rely on the governor to veto every bill we think is bad for business," she said. "There are a multitude of bills that could add taxes that would keep businesses from hiring people. It is up to us, and some lawmakers say they are not hearing from businesses in their districts."

Some lawmakers of both parties said at the chamber meeting that partisanship has kept the governor from working well in his second year with the Democrat-dominated legislature.

But others told the chamber that compromises are in the works. House Speaker Michael E. Busch said negotiations are continuing with the governor, whose top business issues include:

Implementing a surcharge, dubbed the "flush tax," on water and sewer bills to help clean up the Chesapeake Bay.

Funding transportation projects, partially by charging higher fees to register automobiles or raising the gas tax.

Closing a loophole in the corporate income tax law that allows companies that create Delaware holding companies to avoid Maryland taxes.

Expanding gambling in Maryland to allow slot machines.

Reducing premiums for malpractice coverage for doctors, who say they no longer can afford insurance.

Sen. Thomas M. "Mac" Middleton, a Charles County Democrat and chairman of the Senate Finance Committee, added that health care affordability and access also remain pivotal.

Del. Jean Cryor, a Montgomery County Republican, said proposals for increased taxes on snacks and gasoline, among other bills, are tempting to lawmakers when so many projects are underfunded -- particularly transportation.

Cryor served on a commission that recommended raising $300 million for transportation projects around the state. To pay for this and other items, "some taxes will get through and others will not," she said.

For now, tax and regulatory burdens are not unreasonable, and are low compared with those in some states, said Richard Clinch, director of economics for the Maryland Business Research Partnership, a University of Baltimore think tank. And the state weathered the national recession better than many.

"No news is good news from the business perspective," he said. "Rarely has the General Assembly taken a look at business and yielded anything positive. ... Now, Maryland is no hell for businesses, which is what people were saying eight years ago."

Robert O.C. Worcester, president of Maryland Business for Responsive Government, a pro-business group, went as far as to say inaction would be a good thing for business. He called the number of bills that would increase taxes or fees in some way on businesses "unprecedented."

"This is how you drive business out of the state," Worcester said. "I'd rather see the government face up to the need to make cuts than look for ways to add revenue."

One Republican leader said lawmakers need to keep in mind their local employers during the final weeks of debate.

"It would be nice if every member had to run a business for a year, meet payroll taxes, live by all the rules and regulations we pass," said Del. George Edwards, the Garrett County Republican who is House minority leader.

"I bet a lot of votes would be different."

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.