State Revenues

CLARIFICATION - An article in Saturday's editions said the state Department of Natural Resources is considering the sale of 3,000 acres of land, including 584 acres that form a buffer zone around Deep Creek Lake in Garrett County. Because of an editing error, a sentence was deleted that said any construction on this Deep Creek parcel is prohibited by conservation easements and the land is being offered to adjacent property owners under a several-years-old agreement, according to Anne Hubbard, a spokeswoman for the state Department of General Services.

One sign that Maryland's stop-smoking campaign is paying off is what isn't - the state collected $6.7 million less in tobacco taxes last fiscal year as sales continued to dip. Revenue decreased almost 2.5 percent, which is typical in recent years and slightly less than the state had expected, the comptroller's office said yesterday. While cigarette purchases edged downward, revenue from lesser-used tobacco products such as snuff increased 12 percent, or $800,000. All told, the state took in $272.

State revenues appear to have emerged from a more than two-year slump, raising the prospect that legislators will return to Annapolis next year facing a much smaller shortfall than expected. In a letter to General Assembly leaders, chief legislative analyst Warren G. Deschenaux said revenue trends indicate that the state may be facing a $252 million shortfall next year rather than the $800 million to $1 billion that had been expected. Revenues for this budget year had been expected to rise 7 percent but were up 9.8 percent for the year to date at the end of April, Deschenaux said.

Tuition cap bill would worsen budget shortfall C. Fraser Smith's column "When good policy meets good politics" (Opinion Commentary, April 25) is a perfect example of the spend-first mindset that has the state on the verge of a multibillion-dollar budget deficit. Mr. Smith's analysis of the legislation that would impose a 10 percent surcharge on the corporate income tax failed to address the legislation's major flaw: The corporate tax surcharge the legislation imposes would not generate enough revenue to pay for the spending increases and tuition cap the legislation mandates.

FISCAL RESPONSIBILITY, Gov. Robert L. Ehrlich Jr. said in his State of the State speech last week, is the first pillar underpinning his governance of Maryland. That's as it should be, and so we urge state legislators to analyze his latest bill to legalize slot machines by the standards of fiduciary duty required of those heading publicly traded corporations. CEO Ehrlich offers slots primarily to raise state revenues. So, does his plan maximize gains for his shareholders, in this case the citizens of the state of Maryland?

Maryland environmental advocacy groups will release a "green" solution to at least part of the state's budget crisis today, outlining a $145 million package of proposals to raise new revenues and cut spending. The groups' 11 ideas include eliminating what they describe as "environmentally damaging tax loopholes" and increasing the fees charged to companies for pollution oversight programs operated by the Maryland Department of the Environment. "The budget is obviously a critical place where environmental decisions get made," said Susan Brown, executive director of the Maryland League of Conservation Voters.

In a ruling that could open a hidden vault of new tax revenue for Maryland, the state Court of Appeals ruled yesterday that companies doing business in Maryland cannot avoid the state's corporate income tax by funneling profits into subsidiaries in Delaware. The court ruled unanimously that two companies with Maryland operations were circumventing the state's tax laws by transferring profits to Delaware offices that "were little more than mail drops." The ruling concerned only two businesses and about $2 million in disputed taxes, but officials familiar with the cases said they could affect dozens of similar proceedings and perhaps hundreds of cases that have not reached the state court system.

CAN PUBLIC service also prove to be good advertising? The Rifkin, Livingston, Levitan & Silver lobbying firm seems to think so. Former state Sen. Laurence Levitan, a partner in the firm, was recently picked by the Maryland Chamber of Commerce to be its representative on the Commission on Maryland's Fiscal Structure. That's the task force created this spring by the General Assembly to come up with ways to pay for the state's future needs in education, transportation and health care, and they'll be looking at such unpopular alternatives as increasing taxes or expanding the sales tax to cover more business services.

Question of the month Now that more than six months have passed since Sept. 11, how has your life changed? Has daily life returned to its normal course or been transformed by the "war on terror"? Or has the meaning of what is "normal" changed? We are looking for 300 words or less. The deadline is April 22. Letters become the property of The Sun, which reserves the right to edit them. Letters should include your name and address, along with a day and evening telephone number. E-mail us: letters@baltsun.

A year ago, as legislators were deciding whether to improve an obscure tax incentive for historic renovations, the costs of the program had already spiraled upward to as much as $25 million a year, dwarfing all other tax credits in the state combined. But nobody mentioned that to the General Assembly. So instead of hitting the brakes on the program, they made it more generous. A year later, tax credit approvals have tripled, reaching $75 million last year. At least $125 million in tax credits could be cashed out in coming years, just from commercial projects finished or under construction, mostly in Baltimore from the west side of downtown to Locust Point.