Busch tax plan moves forward in 1st key test

Democrats turn back Republican efforts on $670 million proposal

Final roll-call vote is tomorrow

Passage would do harm to economy, GOP says

General Assembly

March 25, 2004|By David Nitkin and Michael Dresser | David Nitkin and Michael Dresser,SUN STAFF

A $670 million tax plan proposed by House Speaker Michael E. Busch cruised through its first crucial test last night, as Democrats in the House of Delegates easily rebuffed Republican efforts to derail the proposal.

During emotional testimony on the House floor that demonstrated stark divisions between political parties, Republicans said the sales, income and car-title tax increases offered by Busch to pay for education would dampen Maryland's economy and infuriate many voters.

"The sales tax is a regressive tax, and any increase in that tax will hurt the poor the most," said Del. Christopher B. Shank, a Washington County Republican who led an effort to block a vote on raising the tax from 5 percent to 6 percent. "This massive, regressive, 20-percent tax increase is totally unnecessary."

FOR THE RECORD - Because of an editing error, an article in yesterday's editions of The Sun incorrectly stated the party affiliation of Del. Steven J. DeBoy Sr., who represents Baltimore and Howard counties. He is a Democrat. The Sun regrets the error.

But Democrats remained unified in fighting off the GOP challenge and casting votes that could be used in political campaigns against vulnerable party members.

Shank's amendment failed on a 48-90 vote, a margin which, if repeated during a final roll call expected tomorrow, would provide enough support to override a promised veto by Gov. Robert L. Ehrlich Jr.

After watching his party colleagues defeat a series of weakening amendments by similar margins, a visibly energized Busch said he expected to lose as many as 15 votes by tomorrow's final tally, obliterating the supermajority.

But Busch praised Democrats, saying they were taking a bold if risky stand to support future education spending mandated by an unfunded 2002 schools reform bill.

"The Maryland House of Delegates and the Democratic Party have stood up and said, `We value education,'" Busch said. "We're tired of giving breaks to special interests."

An air of drama surrounded last night's votes, with political watchers eager to see how Democrats in swing areas such as Anne Arundel and Baltimore counties and Southern Maryland would decide.

"Battle lines are forming. Tickets for Antietam," lobbyist and former delegate Gil Genn said as House members filed into the chamber at 6 p.m.

"You smell that toast in there? It's Democratic delegate seats," added GOP strategist Kevin Igoe.

Democrats solidified their forces during a 5 p.m. caucus, during which party leaders implored their members to remain united, even if some plan on voting against the final bill.

Earlier yesterday, Ehrlich confirmed he would be keeping a watchful eye on how conservative Democrats voted, and that his party would be prepared to use their decisions against them in the 2006 elections.

"In moderate to right-leaning districts, you simply cannot go door to door every four years and talk about the fact that you are fiscally conservative and pro-small business, and vote for stuff like this," he said. "They are mutually exclusive. And that's why today's board, vote after vote, is going to be very relevant, and I think symbolic, in some respects, as to the way the Democratic Party is moving in the state of Maryland."

Busch unveiled the tax proposal this week in what he called a more responsible and practical way to pay for schools than Ehrlich's initiative to legalize slot machines. The speaker proposed raising the sales tax , car-titling fee, corporate income tax and creating a new, temporary, income tax bracket for the wealthiest 3 percent of Marylanders.

Other taxes would be lowered under the House proposal. Low-income earners would get a $30 million break, and the state portion of property tax bills - a small slice compared with county or city taxes - would be reduced by 60 percent. The net result is a $670 million a year gain in revenues for the state treasury.

Two days after the plan's release, the House of Delegates cast a preliminary vote last night on the tax package by agreeing to include it as part of a budget-balancing bill to be sent to the state Senate.

The vote totals are expected to be significantly less tomorrow. Some Democrats said they cast votes last night out of respect for the work of the House Ways and Means and Appropriations committees, but would vote against the final version of the budget bill.

"The people in my district don't want taxes," said Del. Steven J. DeBoy Sr., a Baltimore County Republican. "They want slots."

Maryland's $23.6 billion budget for the 2005 fiscal year that begins July 1 is balanced without the taxes, and the Senate has approved a drastically different version of the budget-balancing bill. So differences will be worked out be a select committee of legislative negotiators.

Senate President Thomas V. Mike Miller said the House tax plan would be a "nonstarter" without 85 votes to overturn a governor's veto. He predicted that some higher revenues, and legalized slot-machine gambling, would be part of a final compromise reached during the Assembly's final 18 days.

Paul E. Schurick, a spokesman for Ehrlich, accused Busch of "stifling" debate last night by rushing votes on the Republican amendments.

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