Tax Package

Reading election returns can be a bit like reading tea leaves -- you just might find what you want to see. Legislators who staunchly maintained that last fall's elections registered clear opposition to any tax increases now find themselves supporting a tax package that will raise $95 million in additional revenues, some for this fiscal year. Chances are these same legislators will decide that the election returns didn't signal an absolute opposition to any tax increases, just opposition to unneeded taxes and wasteful spending.

ANNAPOLIS -- The Senate has narrowly voted to raise taxes by $245 million in an action that fit the classic definition of a compromise: It made no one happy.Senators who voted yesterday, and the delegates who will be on the tax hot seat next, complained the tax plan was too big, or too small, or taxed the wrong things.The $245 million tax package was approved 26-20, just two votes more than the 24 required for passage.It would expand the state's 5 percent sales tax to cover a variety of products and services not now taxed -- everything from snack foods to dry cleaning to massage parlors to pay-per-view TV. It also would raise taxes on cigarettes by a dime a pack and increase by 50 percent the current taxes on wine, beer and liquor.

FACED WITH the prospect of paying more in taxes to use cell phones, consume energy and buy property in town, Baltimoreans have every right to ask if the city is doing more with less. They have every reason to press Mayor Martin O'Malley for evidence that he has economized; after all, city residents are hit with the highest property tax rate in Maryland. But as the debate over Mr. O'Malley's $45 million tax package proceeds, tax-averse city residents also must ask themselves what they are willing to do without.

ANNAPOLIS -- The Senate narrowly voted to raise taxes by $245 million yesterday in an action that fit the classic definition of a compromise: It made no one happy.Senators who voted yesterday, and the delegates who will be on the tax hot seat next, complained the tax plan was too big, or too small, or taxed the wrong things.The $245 million tax package was approved 26-20, just two votes more than the 24 required for passage.It would expand the state's 5 percent sales tax to cover a variety of products and services not now taxed -- everything from snack foods to dry cleaning to massage parlors to pay-per-view TV. It also would raise taxes on cigarettes by a dime a pack and increase by 50 percent the current taxes on wine, beer and liquor.

ANNAPOLIS -- An unhappy state Senate did today what it tried to avoid all session: It voted to force virtually every Marylander to pay more in taxes.The $245 million plan, approved on a relatively close 26-20 vote (24 votes are required for passage), now goes to the House of Delegates along with the Senate's pared-back version of Gov. William Donald Schaefer's $12.5 billion spending plan for fiscal 1993.Although the tax plan likely will be changed by the House, the Senate version would expand the state sales tax to cover a variety of products and services not now taxed, such as pretzels, potato chips and prepared foods sold in grocery stores; repair services; dry cleaning; car phones; lawn care; and pay-per-view TV, among others.

ANNAPOLIS -- The president of the Maryland Senate pleaded with his budget committee yesterday to set aside "petty grievances [and] petty needs" and work with the House on a compromise tax package.The only thing the two houses could agree on yesterday was a 20-cents-a-pack tax increase on cigarettes, and even that could be meaningless if the broader effort to strike a deal collapses.Senate President Thomas V. Mike Miller Jr., D-Prince George's, averted an immediate showdown with the House by persuading his Budget and Taxation Committee to put off for a day a vote on a new tax plan that would polarize the two houses even further.

The Baltimore City Council gave its final approval Thursday to a 2-cent tax on bottled beverages, bringing to an end months of heated debate on how to close Baltimore's largest budget gap in memory. The 2-cent tariff, which is set to expire in three years, represents a compromise between Mayor Stephanie Rawlings-Blake, who had proposed a 4-cent tax, and council members who were pressured to oppose the tax by beverage distributors and store owners. Baltimore appears to be the only jurisdiction to pass a bottle tax this year.

ANNAPOLIS -- With one week to go and counting, lobbyists for Maryland's business organizations still have little sense of whether they will report back to their members as heroes or goats after the General Assembly session.To a large extent the major business groups see their fate tied to the budget and tax package, which still was being negotiated by two House-Senate conference committees through the weekend.And decisions on the other major business topics, including health care reform, tort reform and real estate issues, have been delayed by the all-consuming budget and tax deliberations.

Congress should be wary of President Clinton's tax package, which effectively reverses the sweeping reforms enacted in 1986 and opens the way for the return of the loophole, the tax shelter, the preferences and a lot of other gimmicks beloved by lobbyists, lawyers and special interests.As a populist, the new president is getting mileage out of his proposals to increase tax rates on wealthy individuals and corporations -- initiatives that in themselves have some merit as deficit-reducers. But combined with this, he would reinstitute tax preferences for capital gains, for real estate loss write-offs, for credits on new business investment and for certain uses of energy.

IN THE debate over Baltimore Mayor Martin O'Malley's proposed tax package, the arguments, pro and con, turn on the city's progress. The mayor says the additional revenue generated by new or higher energy, phone and recordation taxes will enable the city to continue its strides in reducing violent crime, improving school performance and keeping the city clean. Raising those taxes, say some City Council members, will impede the city's progress. "A real dent" is how Council President Sheila Dixon characterized the impact.