Glendening May Offer Tax Cut Plan
Washington Post Staff Writer
Wednesday, August 19, 1998; Page B01
Maryland Gov. Parris N. Glendening (D) said yesterday he would not rule out proposing a new tax cut before the November election, to counter support for a tax break for retirees proposed this week by his likely Republican challenger, Ellen R. Sauerbrey.
Glendening said, however, that any new tax cut would depend on how the state's economy fares between now and Election Day. Without directly commenting on Sauerbrey's idea, he stressed that he would act only if it were "responsible" and did not interfere with his top priority, fully funding the state's education needs.
The governor's comments marked the first time he has personally addressed Sauerbrey's plan. His comments followed a ceremony in which he cut the ribbon on a new $6 million elementary school on Sauerbrey's turf, in Baltimore County.
"We'll keep working" on efforts to "hold the line and reduce taxes, and we'll see" whether further action is warranted before voters go to the polls Nov. 3, Glendening said in an interview outside Westchester Elementary School in Catonsville.
Sauerbrey, meanwhile, continued to pound the drums for her tax break for retirees, calling it "the first phase" of a plan to reduce state income taxes by 14 percent on top of a 10 percent cut already approved by the legislature. The tax break for seniors would more than double the current exemption for retirees, from $15,000 to $33,000 a year, resulting in savings of about $800 for an individual, or $1,600 for a couple, she said.
Sauerbrey said she chose $33,000 because tax returns indicate that is the average annual income for a retired Marylander.
"For too many," she said during a campaign appearance in Baltimore, "retiring means relocating" to states with more friendly tax environments for seniors. She said about 140 people move from Maryland every week to avoid its high taxes.
"It's no accident that the only northeastern state to which Maryland is losing residents is Pennsylvania, which has a top personal rate of 2.8 percent and exempts much retirement income," she said.
Her own parents moved to Punta Gorda, Fla., upon retirement, Sauerbrey said.
"No retired person should be forced to choose between preserving their standard of living and staying close to family members," she told workers at a steel fabricating plant that had been an unsuccessful bidder on a $700,000 subcontract on the Baltimore Ravens football stadium, located across the street.
Glendening "got his priorities wrong" in spending state money on the Ravens' stadium and on some facilities at the Washington Redskins' new Jack Kent Cooke Stadium in Prince George's County.
"While he can hand out $300 million to two senior citizens named Cooke and [Ravens owner Art] Modell," Sauerbrey said, she would give a tax break to all persons older than 65.
Sauerbrey said the tax break for seniors would be part of an overall 14 percent tax cut she would give all Marylanders. Four years ago, she proposed a 24 percent cut, which propelled the then-little-known state senator almost to a dead heat with Glendening, who won by fewer than 6,000 votes. Since then, the Democrat-controlled legislature, at Glendening's urging, has approved a phased-in 10 percent reduction in the state income tax for all taxpayers.
As part of her approach to dealing with tax issues, Sauerbrey said, she would try to make it harder for the legislature to raise taxes by requiring a two-thirds vote of both the Senate and House of Delegates, instead of a majority vote.
An economist who studies state tax policies, Bernard Weinstein of the Center for Economic Development and Research at the University of North Texas, called Sauerbrey's argument that Maryland's tax policies are driving retirees to other states "a political gimmick, an old argument to which I don't give much credence."
Often forgotten in such proposals, said Weinstein, a native of the District, is that because taxpayers can write off state income tax in calculating their federal returns, "for every dollar a middle-class retiree saves in state taxes, about 40 cents will have to go to Uncle Sam. That effectively cuts the savings in half."
Meanwhile, Howard County Executive Charles I. Ecker, Sauerbrey's chief rival for the GOP nomination, said he "first would reduce spending and then cut taxes. I believe in trimming costs, and then reviewing the inheritance tax, and acting fiscally responsible."
Taking aim at his opponent in the Sept. 15 primary, Ecker added, "My message never changes, unlike some people's."
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