Piggyback

A visibly angry City Council President Mary Pat Clarke said yesterday that the proposed piggyback income tax increase was not needed because savings next year of $4 million in Police Department health, pension and retirement costs could be used to put more officers on the streets."

Employers will have to be more vigilant about where their employees live to determine the proper amount of local income taxes to withhold under new guidelines issued by the Maryland comptroller of the treasury.One of the major changes in withholding is the piggyback tax imposed by the counties and Baltimore. For the past three years, this rate had been 50 percent of the state income tax rate in all parts of Maryland except Worcester County, where it is 20 percent.But during its last session the General Assembly raised the ceiling from 50 percent to 60 percent.

County Council Democrats C. Vernon Gray and Shane Pendergrass have filed a resolution that would raise the county's piggyback tax from 50percent to 52 percent.The tax, which is the percentage of state income taxes collected for local use, would be retroactive to Jan. 1.If levied, the tax would be expected to produce $4,431,800 in additional local revenue.The increase would add $39 to the state tax bill of an individualearning $50,000 with an adjusted gross income of $40,000.Gray and Pendergrass want to use the money, if necessary, for public education.

Mayor Kurt L. Schmoke hinted yesterday that he may propose an increase in the city's "piggyback" income tax to fund a budget increase being sought by officials of the cash-starved Enoch Pratt Free Library."

The county commissioners decided yesterday to postpone until Tuesday their vote on whether to raise the piggyback income tax on county residents.Commissioner W. Benjamin Brown moved to delay the vote, saying the commissioners could "always use more time" to consider the measure.As a result of the postponement, the commissioners will adopt the county's fiscal 1996 budget Wednesday, a day later than planned. The fiscal year begins July 1.The piggyback tax is a county income tax levied in addition to the state income tax. The state, which collects the money and returns it to local jurisdictions, allows counties to charge up to 60 percent of its 5 percent rate.

The City Council fired the opening salvos last night in what promises to be an emotional debate over the Schmoke administration's proposed 2 percent increase in Baltimore's "piggyback" income tax rate.Some council members who favor increasing the tax, which the administration said would raise enough money to put an additional 120 police officers on the street, argued that residents are fed up with crime and are willing to pay a small additional amount of money for improved public safety.But council members who oppose the proposal said they are just as frustrated with high taxes and said that alternatives to raising income taxes need to be explored to find the additional funds for paying for more police.

For the second time in six months, Baltimore Mayor Kurt L. Schmoke is backing off plans to raise the piggyback income tax in the face of opposition from City Council members who don't want to increase taxes to pay for more police officers.During a rare breakfast meeting with the council yesterday, Mr. Schmoke proposed alternative revenue-raising measures -- using part of a surplus in the police and fire retirement systems and closing loopholes in disposal fees charged to waste and recycling firms.

Several Baltimore City Council members questioned yesterday the need for an increase in the piggyback income tax rate and reacted scornfully to a proposed alternative to the tax that would increase revenues by raising a waste surcharge fee.Among those raising questions were three council members who were previously publicly neutral toward the proposal of Mayor Kurt L. Schmoke to raise the piggyback tax -- a percentage of the state income tax -- from 50...

Many Marylanders still have trouble understanding the state's piggyback income tax system, so it may come as no shock that the federal government is having some trouble grasping it as well.The problem is that no one seems to have informed a key federal payroll center that the Maryland General Assembly's authorization for local jurisdictions to increase the piggyback-tax rate to a maximum of 60 percent was optional.Only five of Maryland's 24 political subdivisions have imposed higher local income taxes by raising the rate -- the "piggyback" percentage that is added on to the state income tax, collected by the state comptroller's office and forwarded to Baltimore and the 23 counties.

The Baltimore County Council has approved a $1.15 billion budget for next year that includes a rise in the piggyback income tax rate, to 55 percent from 50 percent, but no change in the property tax rate.As part of a deal with County Executive Roger B. Hayden, the council also cut $7.2 million from the executive's proposed budget. And Mr. Hayden agreed to reallocate the money to hire (( 40 new police recruits, restore cuts in the Fire Department's emergency medical services program and buy $1 million worth of computers for schools.