ANNAPOLIS – Taxes became the talk of the Statehouse when the General Assembly opened Wednesday.
Re-elected House Speaker Casper R. Taylor Jr., D-Allegany, introduced a tax plan that he said would modernize the tax structure to serve unmet needs.
Taxes, Taylor said, should be based on “growing sectors, not declining sectors.” Sales taxes, for instance, reflect the dying manufacturing economy and not the world of modern technology, he said.
Taylor wants to cut the income tax while expanding the sales tax to professional services and telecommunications.
Meanwhile, Gov. Parris N. Glendening’s proposed income tax cut would slice the rate from 5 percent to 4.5 percent over the next three years, a move he hopes will drive the state’s economy.
Many lawmakers said, however, that the state cannot afford to lose revenue given the cost of new programs Glendening wants. These include college scholarships for “B” students whose family earns up to $65,000, health care for uninsured women and children and a $254 million aid increase for Baltimore schools.
“Can we afford it?” Del. Sue Hecht, D-Frederick, asked.
Hecht is concerned about how to pay for present and future programs. “If a huge problem in our society crops up, I don’t want to break down programs that are working,” she said.
Glendening’s proposed cut would save a Maryland family of four earning $50,000 about $167 annually.
Del. Robert McKee, R-Washington, said his constituents believe “if you are going to put money in my left pocket and take it out of my right pocket, just leave it alone.”
Any change in the budget affects other issues, he said. “Taxes is the major issue but it fingers and ties into others,” McKee observed.
Sen. John J. Hafer, R-Garrett, said the governor’s agenda is both “ambitious and political.” But he worries that the new programs are cheap in the early years, more expensive in the later years.
And he was no more optimistic about the tax cut. “I don’t think it can work,” Hafer said.
He faulted Glendening’s proposed cigarette tax increase, which he said would drive residents out of state to buy their tobacco products. Hafer said he finds it “ridiculous” that a “tax cut” — the income tax — “is being funded by a tax increase.”
Sen. John W. Derr, R-Frederick, suggested that Maryland might be forced to look again at expanded gambling, which Glendening has vowed to oppose.
While a cigarette tax might drive smokers to West Virginia and Pennsylvania, a lack of slot machines has driven gamblers and money into Delaware, he observed. There, slot machines are legal at horse tracks where people are “betting and gambling anyway,” Derr said. Maryland tracks are hurting, he said, and “deserve a serious look.”
Hafer said the session’s 90 days will be a test: “How well can we balance all these things to achieve a balance that ensures the future?”
Taylor, for his part, said in his address to the House that the entire General Assembly “must work together by finding solutions that are found in the mainstream and not in the extreme.”
Hecht, leaving the House Chamber, commented that Wednesday’s opening events had offered “no surprises.” Now, she said, it is about getting down to work and “figuring how we are going to do it all.” -30-