ANNAPOLIS – For the third straight year, a phased-in 24 percent income tax cut tops the House Republican Caucus’ legislative agenda, members announced at a Tuesday press conference.
“The caucus itself didn’t prioritize our agenda, but I think there’s no question that the tax cut is the top item,” said House Minority Whip Robert L. Flanagan, R-Howard, co-chair of the caucus’ tax reduction committee.
Flanagan explained that Republicans feel an income tax cut will help spur Maryland’s lagging economy.
“When you reduce the size and cost of government you free up resources to expand the private sector,” Flanagan said. “The reason the Maryland economy has been in the doldrums is because it is overtaxed and overregulated.”
House Minority Leader Robert H. Kittleman, R-Howard, said that business consultants he has spoken to never recommend setting up businesses in Maryland because income taxes are too high. “Our income taxes are out of line,” he said.
Kittleman and his Republican colleagues said they will again call for a 6 percent income tax cut for 1998, and in each of the three following years.
The 24 percent cut stems from a campaign pledge by Ellen R. Sauerbrey, the GOP candidate for governor in 1994. The caucus that year made it part of a “Contract with Maryland,” modeled after the U.S. House Republicans’ Contract with America.
On Tuesday, caucus members were quick to emphasize that their tax cut proposal would be paid for with specific spending cuts and not with new tax increases.
In a veiled slap at Gov. Parris N. Glendening, Del. James F. Ports Jr., R-Baltimore County, said, “You can’t look people in the eye and tell them you’re going to cut taxes when you’re really raising taxes behind their backs.” Ports is the other tax reduction committee co-chair.
Glendening has proposed cutting income taxes by 10 percent over three years. The lost revenue would be made up in part by doubling the cigarette tax, to 72 cents per pack.
House Republican leaders attacked the plan, saying a tax cut offset by new taxes is not really a tax cut.
But Ray Feldmann, a spokesman for the governor, defended Glendening’s strategy. “The governor has made it very clear that his tax cut is responsible and affordable,” he said.
Feldmann said the governor’s plan is primarily funded by savings from welfare and the health plan for the poor, Medicaid; early retirement of state employees, and a reduction in the size of government. Moreover, Feldmann said the increase in cigarette taxes was a health, not just a revenue, initiative.
Senate President Thomas V. Mike Miller Jr., D-Prince George’s, had not yet seen the caucus’s legislative agenda, but agreed with the idea behind it.
“I think that anybody who proposes cuts in taxes has to identify budget cuts as well,” Miller said. “What we need is honesty in budgeting. Anyone can say they’re going to cut taxes, but it takes a thinking person to say where the money is going to come from.”
But Miller does not think the House Republicans should get too set on a four-year plan: “I think what they should do is focus on the two years left in their terms.”
Labor law reform also figures in the caucus’s agenda. Members hope to make Maryland a Right to Work state, which would outlaw so-called “union shops,” in which union membership is a condition of employment. They say the proposal costs taxpayers nothing, but will guarantees the state stronger economic growth.
Kittleman said passing the measure would attract new companies to the state, particularly foreign ones. “It’s a huge image thing for a lot of companies,” he said.
House Republicans will also fight to eliminate the prevailing wage. Whenever the state undertakes a construction project, the hourly wage of the workers must at least equal the hourly rate paid to 40 percent of the workers in a selected area.
“That’s always higher than market value,” Kittleman said. “That’s $30 to $40 million we don’t get anything for.”
The caucus said this measure could save Maryland 15 percent of its capital project costs. Other agenda items include reforming campaign finance, opposing casino gambling and adopting a zero-tolerance crime program similar to that of New York City, where police now crack down on even the smallest of nuisance crimes in order to raise respect for the law. -30-