Keeping score on taxes no easy task

November 09, 2007|By JEAN MARBELLA

For those of you keeping score at home, health clubs and real estate property managers -- they're good. No new sales tax on them. But landscapers, computer service providers and video arcades -- not so good. The grass-cutters, the geeks, the guy, as one legislator imagined, who offers the coin-operated bouncy horsey outside the store -- they should start boning up on the times-six multiplication table.

If you're not confused, to paraphrase a more famous slogan, you're not paying attention.

What happened to the plan that Gov. Martin O'Malley took on a statewide tour just a couple months ago? You know, the one where most of us weren't going to pay more taxes under his plan for making up a projected $1.7 billion budget deficit. The one where much of the burden was going to fall on the rich, tanorexic, gym-belonging, cigarette-smoking renters, and not the middle-class, property-owning working families.

What happened is the special session of the Maryland General Assembly, under way in Annapolis. Yes, the deceptively pretty little stage set of a capital city, all Colonial red-brick on the outside and august marble on the inside, that turns out to be quite a messy sausage factory in disguise.

Into the factory went one proposal, and out is coming something quite different. In went a property tax rollback and out it disappeared. In went a more progressive income tax structure, out came a still mostly flat system, with a smaller bump at the top end. In went a group of unhappy people -- the aforementioned gym owners and property managers -- and out are coming a group of unhappy people, only a different group.

Surely no one expected, or even necessarily wanted, O'Malley's tax package to come out unscathed. But what's on the table, now that the Senate has had a crack at it, is quite another beast. Some bits have ended up on the cutting room floor, other parts have been amended beyond recognition.

To take just one example, the family with a $75,000 income that O'Malley said would pay $167 less in income taxes would, under the current version of the bill, pay $166 more.

Yesterday, in a daylong marathon session, the Senate took up the marquee issues of its special session -- slots and taxes. On Wednesday, the budget and taxation committee had fiddled with the governor's proposal, so it already had become a different one than O'Malley took on the road in September, to Anneslie one day, to Ellicott City the next, to a rooftop in downtown Baltimore after that.

Anyone sitting at those kitchen tables, coffee-klatching with O'Malley as he outlined his tax proposal, should consider inviting the Senate over for a little update. They might have to put the extra leaves in the tables, because a lot of senators have a lot of explaining to do.

For one thing, the property tax rollback that O'Malley proposed and that was supposed to ease the increases elsewhere is now MIA. An amendment proposed by Sen. George Della of South Baltimore to at least shave 30 cents off the city property tax rate went nowhere, fast. But not as swiftly as his second amendment attempt -- what about 20 cents off, do I hear 20 cents? -- which came up DOA.

Then there was the fiddling with the sales tax -- the proposal to increase it from 5 percent to 6 percent remains, but now it will be expanded to a different group of services, landscape and computer services and video arcades, none of which had any idea they were being considered.

So the gyms and the real estate management interests were prepared, and put on a successful full-court -- or rather, full-lobby -- effort to remain exempt from the sales tax. Meanwhile, the gardening, computer and arcade businesses were caught, well, maybe not with their pants down but without a lobbyist in tow -- apparently a much more dangerous thing this time of year.

And yet, Sen. Ulysses Currie, head of the budget committee, played down the role that lobbyists had on whom the committee decided to tax, or not tax.

"Lobbyists," Currie actually said on the Senate floor yesterday, "almost have no influence on the vote."

Hmm, the guys who would get taxed under the current bill had no lobbyists in place, and the ones who won't get taxed did -- what a coincidence.

The full Senate pretty much went along with the budget committee's recommendations, with a few tweaks here and there. An amendment by Sen. Delores Kelley of Baltimore County to exempt gardening services from the sales tax nearly passed but didn't. Although a subsequent amendment to exempt snow-removal services -- which many landscapers offer in the winter -- did. (With global warming, though, who knows how much of a break this is.)

Nothing is final, of course. The House of Delegates still has to speak, for one thing. Maybe the gardeners and geeks have had a chance to line up their own lobbyists, and, who knows, maybe the sales tax will shift from them to some other group -- the nail salons, maybe, or the dry cleaners, or what about those telemarketers?

Somehow, though, it seems as if there has to be a better way to decide who gets taxed than who happens not to have gotten enough warning and couldn't get someone to Annapolis fast enough to talk their way out of it.

jean.marbella@baltsun.com

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Find Jean Marbella's column archive at baltimoresun.com/marbella

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