Tax Package

Gov. Robert L. Ehrlich Jr. knocked the state budget out of balance yesterday by vetoing a $135 million corporate tax package, and he also rejected legislation permitting undocumented immigrants to pay in-state tuition at Maryland universities. Ehrlich's long-promised veto - one of 19 issued yesterday - was criticized by Democrats who said the governor was placing corporate profits ahead of the needs of average citizens. The governor brushed aside those concerns, saying he was ushering in a new chapter in state governance.

Working into the weekend to meet a deadline, the House Appropriations Committee gave final approval to a state budget yesterday that is still unbalanced because it relies on other lawmakers to adopt a package of new, disputed taxes. The $22.6 billion budget takes more than $200 million from transportation and land-buying programs to pay for general government operations, and makes deep cuts in higher education spending. But those moves weren't enough to balance the budget. The proposal assumes that the House Ways and Means Committee will approve a $175 million package of additional taxes tomorrow, though that panel has delayed a vote several times and Gov. Robert L. Ehrlich Jr. has vowed to veto some tax bills.

WASHINGTON -- Thanks to the budget deal that President Clinton will sign today, many people struggling to pay for college or graduate school next year will be getting some help from the federal government through a variety of tax breaks.That should be welcome news to millions of middle-class American families who must work harder, forgo vacations or other types of spending and take out large loans to pay for their own or their children's education.The question is, what impact will the education tax package have, either on those who cannot currently pay for college or for those who scrimp to pay tuition bills as high as $30,000.

At first glance, Jeff Hazard would seem to be a tailor-made opponent of the $670 million tax increase that cleared the state House of Delegates last week. One day soon, the 30-year-old Baltimore man will probably earn a big enough salary at his corporate job to see dollars sliced from his paycheck with the higher tax bracket lawmakers have in mind for well-off Marylanders. What's more, Hazard and his wife, Kristie, are expecting a baby any day. So they will be shelling out a load of money, plus sales tax, on all kinds of new purchases.

It took three carefully scripted days, but Maryland's ruling Democrats finally put in place the budget deal that eluded them in the waning hours of the state's regular session last month. The revenue package approved by the House on Wednesday will raise income tax rates on 14 percent of Maryland taxpayers while shifting some teacher pension costs to counties. The adjournment of this week's special session effectively ended the first budget impasse the state had seen in two decades.

A City Council not known for flexing its muscle with the mayor appears to be doing just that, offering Martin O'Malley about $15 million less than he sought for the next budget. In preliminary votes yesterday, the council signaled its intention to cut O'Malley's proposed $45 million tax package to just under $30 million. The result will likely be cuts in city services and jobs in the fiscal year that begins July 1, administration officials said. Pink slips are in the mail to hundreds of city workers.

The chairwoman of the House committee that oversees gambling said yesterday that she will not permit slots legislation to move forward unless Gov. Robert L. Ehrlich Jr. agrees to a tax package of at least $500 million - a demand that could prove insurmountable. "Our position is that if there is going to be a slots bill, we want it to have another revenue source," said Del. Sheila E. Hixson, a Montgomery County Democrat and chairwoman of the House Ways and Means Committee. "We're not going to do slots unless we have taxes, too."

The Baltimore City Council passed $30 million in increased telephone, energy and real estate taxes last night, part of a $2.1 billion budget that - despite the new revenue - still calls for cutting some municipal jobs and services. Finalized in a daylong series of meetings, the tax and budget package was the result of unusually tough bargaining between the council and Mayor Martin O'Malley, who had sought $45 million in higher taxes to stave off deep cuts in the budget year that will begin July 1. O'Malley thanked the council for increasing tax revenues, which he called a politically painful but necessary step to avoid such quality-of-life cuts as less-frequent trash collections and fewer police officers on city streets.

Save water. Use oil paint. The difference between day trading and Russian roulette is somewhat better odds of survival in the latter game. The Republicans compromised with the Republicans on the tax package. They may ban fox hunting as cruel and inhumane in Scotland, England and Wales, but fox-hugging British lefties will never muzzle the hounds in Green Spring Valley.

The General Assembly's speedy embrace of Gov. Martin O'Malley's income tax increases this week cleaned up a political mess in Annapolis, but the rate hikes could come back to haunt the Democrat if he seeks national office when his time in the governor's mansion is up. O'Malley's tax package, which won final approval from the Democratic legislature on Wednesday, will give Maryland's top earners the seventh-highest income tax rate in the country....