Back Taxes

The Anne Arundel County teachers union released results yesterday of a recent survey showing that voters think education is a more pressing issue than the economy or the county's growth and, separately, would support a tax increase, if needed. The phone survey of 819 randomly selected Anne Arundel voters found that a majority was in favor of a slightly higher income tax rate that would cost the average household an extra $75 a year. The tax-increase question was not specifically linked to education.

The second of two Delaware holding companies that fought all the way to the U.S. Supreme Court to avoid paying taxes in Maryland has settled with the state's comptroller. Maryland couldn't reveal the settlement amount, but it said SYL Inc., the holding company for clothing retailer Syms Corp., owed almost $1 million in back taxes, interest and penalties. The comptroller's office has collected nearly $14 million from 18 holding companies since winning court cases against SYL and the holding company for packaging manufacturer Crown Cork & Seal Co., which also agreed to pay up recently.

The state comptroller got few takers for a pay-less-now deal to companies using Delaware shelters to avoid at least $78 million in Maryland taxes, interest and penalties. Of the 70 companies that responded by yesterday's deadline, one paid approximately $250,000 and three others said they want to take the settlement. About a dozen asked for more time or made counteroffers. State officials would not identify the companies. The comptroller's office said it's possible more letters postmarked yesterday will show up in the next few days.

Annapolis should offer tax relief to low-income residents and provide additional education about available tax breaks, a task force will tell the city council at a meeting tonight. "I just don't think people understand the programs that are out there," said task force member Fred Puddester, a former state budget secretary. "They're somewhat complicated." The council created the task force to review tax credits for fixed-income residents "in order to offset excessive assessments," the report states.

The last major player finally weighed in yesterday when the Howard County PTA Council voted to embrace County Executive James N. Robey's controversial transfer tax increase, but the endorsement might be too late to mobilize enough parental forces to save the bill. Robey said he has angered members of the Howard County delegation, which will vote on the proposal Feb. 12, by pressuring them to take an early stand on the tax designed to offer the school system $215 million worth of borrowing power for construction over the next seven years.

When it acquired Times Mirror Co. nearly two years ago, Tribune Co. picked up seven daily newspapers - and maybe a giant tax headache as well. The Chicago-based media holding company is locked in a high-stakes dispute with the Internal Revenue Service over the tax accounting on a couple of transactions that Times Mirror pulled off in 1998. If the IRS gets its way, Tribune will have to pay the government $880 million in back taxes, penalties and interest. That's more money than the company has earned over the past two years.

The Maryland Senate voted yesterday to increase the cigarette tax by 34 cents a pack and earmark the money for schools, a critical step toward passing a long-term, $1.3 billion package of new education spending. The Senate could take a final vote today on the education-spending legislation recommended by the Thornton Commission. Opponents are threatening to filibuster, saying it is fiscally irresponsible to approve more spending without knowing where all of the money will come from. Even if the measure wins Senate approval, it faces stiff opposition in the House of Delegates.

An expected spike in tax amnesty collections in the weeks before the Oct. 31 deadline did not materialize, and the state has received only $12.96 million in penalty-free back taxes so far - well below the $70 million figure that legislative analysts had predicted. The results are the latest budgetary woe for Maryland after legislative policy analysts cautioned this week that the state could face a $1.7 billion shortfall by the end of next year. The state comptroller's office won't have final collection figures for several more days, but state officials said that the events of Sept.

With 19 days to go, the state has received less than 10 percent of what it expects in its drive to collect back taxes - without penalties or interest - from individuals and businesses, the state comptroller's office said yesterday. The $4.7 million collected falls far short of the $50 million that the General Assembly expected to be able to disburse. Legislative analysts had estimated $70 million could be collected. But Stephen M. Cordi, the deputy comptroller, said that this year's tax amnesty program is outpacing the state's last program in 1987, and that collections will greatly increase in the days before the Oct. 31 deadline.