ANNAPOLIS – Increased sales taxes, revenue from legalized gaming machines and freezing tax reductions could be used to fund the $1.1 billion boost to be recommended for Maryland public schools by the Commission on Education Finance, Equity and Excellence.
The commission, charged with overhauling the state’s school financing system, was briefed Thursday on sources for the more than $1 billion it would like to pump into public education by fiscal year 2007.
The recent economic downturn has tightened the budget, so the commission decided to look at a variety of ways to gain revenue.
The commission reviewed more than two dozen possible revenue resources previously suggested during public hearings or that have cropped up during recent legislative sessions. But funding possibilities aren’t limited to those presented to the commission, said Mike Yarborough, a policy analyst who gave the presentation.
“There are infinite ways for the state to raise revenue,” he said.
The combination of legalizing video lottery terminals and expanding the sales tax would give the commission enough funding, suggested Delegate Howard P. Rawlings, D-Baltimore.
“I think you can do everything you need right here,” he said, motioning to the proposal.
Legalizing video lottery terminals could produce $300 million to $400 million if 40 to 50 percent of the proceeds were returned to the state.
A committee appointed by Senate President Thomas V. Mike Miller Jr., D- Calvert, this year is studying the issue of allowing slot machines in Maryland racetracks.
State sales taxes, which already encompass cell phones and pagers, could be extended to other business services to produce about $500 million annually, the commission was told.
Millions in savings could come from reversing the state income tax reduction enacted in 1997 and raising the sales tax from 5 to 6 percent, according to the briefing.
The commission made no determination about potential revenue sources at the meeting.
Its final report is due to the governor in December. A public hearing will be held 7 p.m. Nov. 19 in Annapolis to gauge reaction about the proposal, as well as hear suggestions for funding.
The commission recommended in an early draft report that the governor redirect other funds to its education recommendations, but that won’t be enough to cover the suggestions.
Gov. Parris N. Glendening announced about $205 million worth of cost-containment measures over the next two years to forestall the projected $1.7 billion deficit by the end of fiscal year 2003.
Glendening should continue making cuts to help provide education funding, instead of imposing more taxes or installing gaming machines, said Delegate Jean Cryor, R-Montgomery.
“The budget keeps growing and growing and growing,” she said. “Not one of the (suggested revenue sources) are usable.”